American Enterprise Institute

October 16, 2006

[Edited transcript from audio tapes]

9:45 a.m.	Registration
10:00	Panelists:	Patrick Clawson, Washington Institute for Near East Policy
		Thomas Donnelly, CSIS
		Danielle Pletka, AEI
		Michael Rubin, AEI
11:30	Adjournment

Proceedings:

Michael Rubin:  Everyone can have a seat.  I want to welcome everyone here today for this panel about the spread of nuclear weapons, is Iran next?  And more importantly, what can be done about it?  Before I begin, I do want to thank Omeed Jafari for putting this panel together.  He’s in the front row.  At any rate, the situation in Iran has grown to become a consistent feature of newspaper headlines and a consistent problem in American foreign policy.  It is one that isn’t going to be limited to the current administration, but will likely become a focus of foreign policy in the next administration, as well.  With that, we wanted to put together a panel of experts.  I’m thrilled to have Danielle Pletka, Patrick Clawson, and Tom Donnelly with us today to talk about various issues relating to what policy prescriptions America has.  What can we do about the spread of nuclear weapons, specifically to Iran? 

With that, I want to introduce our panelists.  Danielle Pletka is Vice President of Foreign Policy and Defense Studies here at the American Enterprise Institute.  She’ll be speaking first, and she’ll be talking about some of the legislative issues with which the United States might use to deal with the Iranian nuclear issue.  Following her will be Patrick Clawson, the Deputy Director of Research at the Washington Institute for Near East Policy.  He is the co-author of Eternal Iran: Continuity and Chaos with me, which was published last year.  He’ll be addressing some of the economic issues relating to Iran and how the U.S. might address them.  Lastly, Tom Donnelly is the senior advisor in the CSIS International Security Program and a former colleague of ours here at AEI.  He will address some of the military issues that play into the American calculus.  I’ll bat clean-up today and discuss a bit of what occurred on the panel afterwards.  With no further ado, I’d like to turn the floor over to Danielle Pletka.

Danielle Pletka:  Thank you, Michael.  Good morning, everybody.  Thank you for being here.  We've talked a lot about North Korea in the last week or two.  Iran has in some ways shifted to the back burner, although in terms of policy urgency I think it remains very much on the front burner.  In some ways these are dissimilar issues, and in other ways similar.  When you look at Congress’ approach to the two questions – North Korea and its possession and testing, and Iran’s perspective acquisition of the technology and expertise to develop nuclear weapons – you do see a very different approach. 

Congress has been - I don’t want to call it reticent because I don’t think it entirely has been – but it has been less active on the question of North Korea, although the President did sign into a law a bill expanding sanctions against North Korea just last week.  He also signed the Iran Freedom Support Act after a great deal of storming on Capitol Hill and elsewhere about its passage.  That bill, which was originally introduced by Senator Santorum, expands the sanctions on foreign companies that invest in Iran.  Or course, American companies are precluded from investing in Iran.  It also expands the definition of what investment in Iran means to include parent companies, financial institutions that back investment in Iran, and more. 

I think there has been a consensus that the legislation and the extension of the Iran-Libya Sanctions Act are unlikely to have a great impact on investment in Iran.  That’s an interesting question.  There is a great deal of debate about whether the original passage of the Iran-Libya Sanctions Act actually had any impact.  I believe that it did have a great deal of impact, although it is certainly an arguable point.  But when it passed during the Clinton Administration, there was no doubt that there was a chilling effect on investment in Iran. 

People didn’t look once or twice, but three times at the prospect of investment and asked themselves whether it was worthwhile getting crosswise with the United States to go into Iran.  You did see a lot of companies who had been contemplating investment actually pull back.  I think that effect largely dissipated with Secretary of State Madeline Albright’s announcement that we wouldn’t be sanctioning anybody who actually did it and everyone would get waivers.  That removed a great deal of the psychological impact.

Now what we see is a different problem.  The people who are investing in Iran are mostly our allies.  It’s true that China is not an ally, but the vast mass of money going into Iran is coming out of Europe, and Japan and South Korea to a certain extent.  I know Patrick is going to talk more about the economic issues so I don’t want to get into them too much, but I do want to suggest that the idea of splitting our coalition with the Europeans and suddenly starting to sanction a variety of European companies and investment agencies will not be a terribly effective way of keeping that coalition together.  Rather, the slow and steady pressure that the Treasury Department has built up in pressing banks to stop investing and sanctioning an Iranian bank with branches all over the world – I think that has been effective. 

There a couple of different ways you can look at it.  One is that countries are starting to question whether an investment in Iran is wise, given Iran’s obvious intransigence – Mahmoud Ahmadinejad’s repeated announcements that not only will they not stop their drive toward a nuclear program, but in fact won’t stop enrichment or even suspend it.  They will not meet the watered-down demands of the Security Council; they will not trade, or do business with anybody.  They want people to come to the table while they have their enrichment program in place.  That has gone a long way toward pressing the investors to second thoughts.  I think the Iranians themselves have also looked to certain investors and wondered whether they are a sure thing.  There is a large German investment that was slated to be made in Iran, but the Iranians eventually turned back from that and gave it to domestic competitors.

European exposure in Iran is really big.  Some have speculated that if there were investment and trade sanctions on Iran and the Investment Guarantee Agency, which does guarantee a great deal of German investment in Iran, it would lose up to $5 billion.  I think the French are in much the same position.  Patrick will tell you more about that.  All of that puts Congress in an awkward position. 

What do they want to demand the administration do?  In large part, they are willing to demand a great deal on the symbolic front, but less happens on the action side.  You see tensions exist inside the Congress between people who want to push harder for decisive actions, and those who do not wish to see decisive actions but defer to the State Department’s way of doing things cautiously in a limited and non-confrontational manner.  Even efforts by the Congress to demand a better service from our own agencies fall short – when the Chairman of the Intelligence Committee in the House demanded better service from the CIA, he got slapped back extremely hard.  In other words, Congress does not have a clear field to push forward for stronger movement on this because the administration itself and outsiders are going to push back.  I don’t think legislative action is going to be the way we see pressure brought to bear on the Iranians.  How do I think we’re going to see the pressure brought to bear on the Iranians?  Unfortunately, I don’t see it at all.  That, of course, is part of the problem.

I’ll just take 10 seconds to look ahead very quickly.  It’s a very funny thing.  It has been amazing to me to see that the Democrats, particularly in the House – the Speaker of the House, the possible Speaker of the House if the Democrats win in November.  Democratic leader Pelosi and others on the Intelligence Committee have been very clear that they don’t see Iran as the same kind of threat that the Republicans do.  This is a very strange thing, and I’ve never been able to understand why they would want to take a counter position.  It’s better to take position to the right of the Republicans, who have not been strong enough on Iran.  That’s something to talk about after the election.  We will do that then, and with that I will conclude.  Thank you. 

Patrick Clawson:  When talk turns to sanctions on Iran, the two usual statements that we hear are that first, the United States is sanctioned out.  There is nothing more that we can do to sanction Iran.  Second, sanctions are unlikely to have much effect on Iran’s nuclear program.  Both of those statements are wrong. 

Let me start with the first one.  It’s not true.  In fact, the actions that the Treasury Department has taken over the last 6 months have had a considerable impact on the Iranian financial system.  If you don’t believe me, go read what the Iranian banks themselves are saying.  The Iranian Central Bank Governor is saying that it’s going to be extremely difficult for Iran to proceed with oil sales in the same way it would have, if the U.S. continues with these kinds of pressures.  The Iranian Bank’s own reports say it’s difficult for them to open the letters of credit which are necessary to carry out ordinary export/import activities, that is because the United States has effectively used both formal pressure and informal guidance. 

The formal pressure has been to forbid what are called u-turn transactions.  This is a sensitive issue because many European and other industrial regulators resent U.S. attempts to prevent their banks’ access to U.S. dollars for transactions.  Frankly, we couldn’t engage in this activity unless we had some tacit approval from the Europeans.  That is exactly what is happening.  Instead of the Europeans raising the usual objections about the U.S. attempting to exercise extra-territorial impact on their banking system, the reaction in Europe has been a quiet examination of whether it’s possible to cooperate with the United States’ efforts against these banks. 

The Treasury Department has been careful about laying the groundwork.  It’s active against one bank – Bank Saderat – and only after catching them red-handed at financing terrorist activities.  It was a clear violation of UN Security Council Resolution 1373.  By the way, there is a parallel resolution:  Security Council Resolution 1540, which addresses the financing of weapons of mass destruction.

The U.S. has also done something that is not our usual style of regulation, which is usually a formal decree.  The Brits in particular are very good at calling someone into the club for lunch and telling them not to do something.  That’s more or less what Stuart Levy has been doing.  He’s been going around the world and telling banks it’s not going to be good for their publicity if they get caught doing this.  That has led a number of banks to look again at the Iranian market and think maybe it’s not that attractive.  On this, we have certainly been helped by Ahmadinejad and his nutty economic policies.  His war of inflation has consisted of ordering the banks to lower their interest rates and then blaming the state media for reporting about price increases.  This has been quite effective at ruining his relationships with the banking system and the media, but it has had no impact on inflation. 

There are a variety of other things we can do, and I expect that we will get quite a bit of quiet cooperation from a number of other governments.  When I take a look at the position that a Japanese oil company took in the negotiations about the recent failed deal for investment in a major oil field, the Japanese company was insisting that the oil field had to be swept of mines.  This field had been fought over in the Iran/Iraq War.  That sounded reasonable until you discovered that the Japanese insisted that the field be swept to a depth of 16 meters.  One doesn’t have to be a military expert to recognize that it’s unlikely anybody planted a mine at the depth of 16 meters.  It’s kind of hard to sweep a very large field of thousands of square miles down to that depth.  One might almost think the Japanese oil company was looking for an excuse not to proceed with the deal.  I think we’re going to see other such things – companies pulling back from the Iranian market and deciding it’s not worthwhile.

Will this have an effect on the Iranian nuclear program?  I would be the first to acknowledge that I doubt it’s going to have much impact upon the Iranian leaders’ desire for pursuing nuclear weapons alone.  The Iranian hard line leaders don’t care enough about money to make decisions solely on the basis of how it is going to benefit ordinary Iranians.  I do think there is an important part for the Iranian elite who do care a lot about the country’s economic development, who are very upset about these circumstances.  They are openly agitated with Iran. 

The former President Rafsanjani released the letter that ended the Iran/Iraq War where Khomeini said this was something we really want, but we have to recognize that we can’t do it.  Everyone knew exactly what he meant.  That also applies to nuclear weapons.  For Rafsanjani, economic development really is a priority, but he is on the outs.  He is not a decision maker at the moment.  The key decision makers aren’t influenced primarily by economic matters. 

The effect our sanctions can have is in slowing the nuclear program.  Iran’s nuclear program is proceeding at a much slower pace than most of us had anticipated, including what the Iranians had announced.  They seem to be having serious technical problems.  Perhaps they are just proceeding on a covert basis and hiding from us, but that doesn’t seem likely if they have to reinvent the wheel at every step.  They got a set of blueprints from A.Q. Khan.  Since I can’t assemble IKEA furniture with the blueprints provided, I’m sympathetic to their inabilities to assemble a complicated centrifuge system.  Go talk to the Dutch company from which Khan stole these designs, Urenco.  Urenco is building a commercial centrifuge facility in Hobbs, New Mexico.  They just broke ground on this last summer.  They said it will take them three years to complete it and they’ve got the expertise; they’ve done this several times.  These are not easy things to do. 

If we can slow down Iran’s program, that’s good news.  The more we slow down the program, the more likely it is that Ahmadinejad and his crowd will stumble and fall, and the more likely it is that the price of oil will drop.  And one way or another, the U.S. will be less tied down to the situation in Iraq.  Therefore, Iran will be in a worse position and the United States will be in the better position to deal with this problem down the road.  Sanctions can have an impact on that and the resolution being discussed at the Security Council – which may well be adopted as early as this week – will be very useful.  The United States will be able to step up its pressure to go around the world and tell a lot of industrial companies that it will not be good if their things are found in the Iranian nuclear program. Here is a list of things that can be used; you better think hard before you export any of this stuff to Iran.  This may lead to a number of companies to scale back or end their activities in Iran.  That would be quite useful.

Michael Rubin:  I want to thank Patrick for that and he will be going into significant detail about some of the economic levers inside Iran in the forthcoming issue of The Middle East Quarterly.  With that commercial aside, I turn the floor over to Tom Donnelly to discuss some of the military issues.

Tom Donnelly:  Getting back to our regular program, Michael.  It’s my rather lugubrious task to run through the military options that might be considered, although Patrick has suggested one I hadn’t thought of previously.  With his IKEA analogy, if we could just find the factory that makes those stupid fasteners that are unavailable in any hardware store that hold all the IKEA furniture together.  If we could target that, we’d probably bring the Iranian nuclear program to its knees.  The downside is that it’s probably a Chinese-made fastener.  That could be a positive thing, too.

To run through the range of military options, first I will illuminate some operational issues to do this in a sort of strategy-free environment.  Then I will return to some issues that a military campaign might raise.  I’m going to go from zero to full speed and then stop intermittently to illuminate what kinds of options military planners might consider.  I will begin with the lowest level of effort, not to make any presumptions what event might trigger this. 

There is what I might describe as the Afghanistan Mujahedin option.  That would be to provide covert or quasi-covert funding, organizational help, and probably military supplies to some flavor of Iranian resistance group.  You might have to create and organize Iranian resistance groups from a very low state, but that is at least one longer-term military option that could be used to conduct acts of sabotage against elements of the Iranian nuclear infrastructure or political targets.  Again, I’m just going to run through these before discussing pluses and minuses. 

The second one that is probably most often fantasized about in the open source material is an Osirak-style attack.  It is a sort of one day, one time set of strikes that somehow brings the Iranian nuclear program to a halt or so complicates it to set it back for a matter years.  Quite obviously, the difficulty is that the Iranians anticipated this to a certain degree and distributed their nuclear program across the country and hardened the targets.  They have taken some risk and cost with the efficiency with which they pursue their nuclear efforts in order to guard against this. 

There are both American and Israeli versions of this alleged option.  I think the chance or ability of the Israeli Air Force to conduct an effective strike is almost zero.  First of all, they’d have to fly through Air Space controlled by the United States.  It would have to be an operation conducted with our agreement or acquiescence.  Some people are constantly saying that the Israelis will take the matter into their own hands, but I think the military logic is very strongly against that.  I would question the Israelis’ ability to do this in more than a nuisance fashion.

The next level of escalation is a kind of a Desert Fox brief campaign - the Desert Fox reference being the 1998 4-day cruise missile and air campaign attack on Saddam Hussein’s Iraq when the UN inspectors had been kicked out.  In retrospect, it turns out that this was indeed a more effective set of strikes than we thought it was.  I think that’s probably simply serendipitous.  We’ve also been observing and cataloguing targets in Iraq in a microscopic way through the no-fly zone operations the previous 4 years.  Whether you could replicate even that level of success with that small level of effort - with Iraq and Iran being quite different targets - is open to question.  It is at least something that the U.S. military knows how to do.

In staying within the strike or air campaign boundaries, the next level is a “shock and awe” campaign, to use those awful words.  Hopefully it would be expanded and improved upon from recent experiences, but it is something on the order of a 3-week extensive air campaign that targets not simply nuclear sites.  It would require repeated strikes and constant pounding with a lot of ordinance.  It would also attack regime leadership targets, air defense targets, and things like the cruise missile sites overlooking the Straits of Hormuz.  It would generally be expanded to try and cripple the Iranian military and call the leadership of the country into question, and to be able to assess damage on the Iran nuclear infrastructure. 

At that point, you probably cross the threshold into a campaign that includes the insertion of some ground forces.  This would be a large scale raid using Special Operations and Airborne Forces to actually put boots on the ground in and around the Iranian nuclear facilities to make sure the damage was complete, do follow-up targeting, and to try to snatch scientists and documents.  That could also be expanded over the course of time, depending on how long this raid lasted, onto the oil terminal facilities near the Persian Gulf.

We’re almost done.  Continuing along the spectrum, it would be possible to do a limited land grab kind of campaign.  Ironically, this would take a page from the book of Saddam Hussein and his initial invasion of Iran in 1980 of the southern province of Khuzestan.  This is where a lot of the oil infrastructure is and where ethnic lines are blurred.  That was regarded as a juicy target that would have a huge effect. 

It’s a difficult thing to do.  We have to expect that Iranian defenses would be well prepared along the lines of the Hezbollah defenses, although in a much larger area.  As the Iraqi Army found out, the trafficable terrain in that part of the country isn’t as great as it appears on a map.  While the U.S. Army would have far greater maneuvering capabilities, it’s still a tough nut to crack.  You might complement this with a similar kind of campaign into Iranian Kurdistan launched from Iraq.  You’d be able to use Afghanistan as a staging or basing area for these kinds operations, at least in the technical tense.  But again, the purpose of such a campaign would not be outright conquest or direct regime change in Iran.  It would be to grab something of real value to the regime in Tehran and then use that as leverage to get them to give up their nuclear program or for broader political change. 

At the maximum end of the scale is a full invasion.  This would be more challenging, using the march to Baghdad as an illustrative example of this.  Where it would lie in the difficulty spectrum is very hard to say.  I think that the Iranian Revolutionary Guard would more likely follow the Hezbollah model of fighting to the death and not running away.  Their defenses would be much more formidable than Iraqi defenses have ever been.  And Iran is a much more difficult piece of terrain; it’s a larger country with a larger population.  If the object is to march to Tehran, you’re already in for a much longer and larger scale operation than we’ve ever experienced in Iraq.

That’s the range from zero to 60 of what the military options are.  They obviously raise a whole host of strategic and political issues.  I’ll just toss out a couple.  One operational issue is the pre-war stance from which we engage.  If we want to do anything larger than a very limited strike, there is going to be a deployment signature associated with this.  We will lose technical and operational surprise.  I think we’ve already lost strategic surprise.  The Iranians have to think that this is something we’re talking about.  And if we do this, what is it that we do about the nuclear program, materials, scientists, and the infrastructure that Iran has assembled over the years? 

As this process goes along, even if Iran is moving slower than we anticipate, it’s not like we’re going to know for certain what the state of the Iranian nuclear program is.  I don’t think the Iranians will follow the North Korean example and announce what turn out to be missile failures or nuclear failures.  There will be some uncertainty about that and more as time goes along.

The second question is what will be the next Iranian move?  What happens on day 2?  It’s not just the Iranians; it’s our enemies in the region and our allies.  We don’t just need these allies in Iran, but we need them in Afghanistan and elsewhere around the region.  There is also the question about the broader international community.  What is the response from China or Russia?  They wouldn’t necessarily intervene militarily, but I can’t imagine there wouldn’t be a price for it.  There are two final questions, which are two sides of the same coin.  Is it really the weapons we are really worried about, or is it really the Iranian government?  What’s the real target that is worth the cost of going to war?  Even the most limited kinds of strikes begin a new campaign in the long war – one whose outcome will be uncertain.  How does this fit into our long war strategy? 

Speaking personally, I think the cost/benefit analysis over the last six months has probably changed.  Our ability to stall for time or kick the Iranian nuclear can down the road is less tolerable.  The likelihood of military options, which are only adopted when they are the least bad option, is somewhat greater than it was at the beginning of the summer.  I won’t put a percentage or number on it.  As unappetizing as the range of military options is, you have to wonder whether these are decisions we’ll have to confront sooner or later.  People in the Pentagon are certainly working their way through these options.  That is the end of my presentation.

Michael Rubin:  Thank you very much, Tom.  I’ll be very curious how some of the blogs transform your menu of analysis into a menu of recommendation, but such is the life.  We’ll have the full transcript on our webpage so that won’t happen.

We talked about the full range of options of what is out there.  Danielle talked about some of the legislative options.  Patrick talked about some of the economic options.  Tom talked about some of the military options.  I’d like to suggest that when we talk about a full range of options, often they are on a continuum of diplomacy on one end and war on the other.  That’s the menu.  Too often the logic says that if all of these options are problematic, or if none of them offers an immediate definitive solution to the crisis, then the diplomacy is the only option left. 

I’d argue that is not the case.  A lot of people will talk about foreign policy and how it is caught in a dichotomy between realism and neo-conservatism, or whatever the two poles you want to define are.  Realism is realism and the other is ideological.  I’d argue that it’s just as ideological to assume that diplomacy always works, despite all evidence to the contrary.  If you’re walking off a cliff, no matter how much you try to negotiate with gravity the end result is still going to be the same. 

These arguments between war and peace aren’t anything new.  In the early 19th Century around the time of the Barbary Wars, Thomas Jefferson did a great deal of writing arguing that you have to consider the issue of economic sanctions.  If you don’t, it just removes one arrow from our quiver – one more step that we can take between peace and war.  In the policy debate in Washington or the international debate in the United Nations, people argue against ratcheting up pressure or sanctions.  What we end up doing is removing one tool that we have.  It may not be the effect of the people who want more diplomacy, but as time goes on and these other options disappear, it leaves us with fewer options and may bring the trigger of military conflict closer. 

I think there is consensus around Washington, straw men arguments aside, that no one wants to see military action against Iran.  Everyone who is serious recognizes the tremendous backlash which would ensue, both within the United States and Iran.  My biggest concern with military action right now is that most analysts would argue that any military strike wouldn’t necessarily eliminate Iran’s nuclear program.  It would only delay it.  Therefore, the question becomes do we have a policy in place to rectify this problem and take advantage of that delay?  It would be quite dangerous to use a military option as a crutch just to kick the can down the road because politicians and diplomatic officials don’t have the wherewithal or responsibility to come up with their strategy now. 

In your packet, you will find our inaugural Middle East Outlook.  That is my third commercial announcement of the day.  It argues with some of the record of diplomacy with regard to Iran.  I’m not going to repeat the whole argument there.  It’s also available on our website, in both Persian and Arabic.  The questions becomes what can we do?  I would argue that for the last 6 years, and even prior to that, we’ve been so busy with our inside-the-Beltway debate trying to knock down the other strategies that we haven’t given certain strategies time to succeed, be they issues of sanctions perhaps augmented by not granting waivers across administrations. 

I’ve spoken before about issues such as the [indiscernible] Model – support for independent labor.  That doesn’t necessarily mean monetary support.  The Vahid bus drivers who went on a 9-month strike hardly got a peep from Washington.  I found it ironic that Mansour Osanloo had part of his tongue cut off by government vigilantes.  While he refused to be silent, the White House itself was silent.  Just last week, we had Ayatollah Boroujerdi arrested.  Again, there was hardly a peep out of Washington.  It’s significant when senior Ayatollahs are willing to speak up questioning the concept of clerical rule, and yet we’re too constrained.

One of the other issues I think we do need to address is the issue of stigma.  This been bantered about in the blogosphere, sometimes in an irresponsible manner.  Does it hurt or help if the United States gives assistance to people who are struggling for freedom or to make the government more accountable to the people?  Assistance doesn’t necessarily mean military action.  I think people who have seen my writing know I’m against playing the ethnic card in Iran.  I’m against a repeat of the Anglo-Persian War of 1856, where the British seized Khuzestan.  We need to question what a stigma is and what is our decision to make?  If Iranians are bold enough to stand up, who are we to patronize them by saying they don’t know what’s good for themselves? 

The last point before opening the floor to questions is what worries me now most.  As diplomacy goes forward our seventh last chance when it comes to Iran is the issue of red lines.  It’s all well and good to speak about what Iran can or can’t do.  We gave a deadline on August 31.  Iran busted through it and there was no response. 

I would argue that the greatest danger right now is a misjudgment of what our red lines are.  When people talk about military action, all too often it’s assumed that Washington will make the decision.  I’d argue no, we might be in a position where we are pushed into action because Iran is pushing and pushing while our hands are tied.  They don’t fully understand what the debate is in Washington.  As Hezbollah did with Israel, they may simply push too far and be surprised at the reaction.

With that, I will wrap it up and turn the floor over to questions.  The rules for questions are my rules.  You can ask as many questions as you want, but we’re only going to answer the first one.  Let’s save everyone the trouble.  There are jeopardy rules, which means phrase your statement as briefly as possible in the form of a question.  Third, wait for the microphone.  And fourth, I have a lot of rules.  Identity yourself, even if you think we all know you, and identify your affiliation.  There is no one in Washington who doesn’t have an affiliation.  They may not want to admit it, but so be it.  If not, I’ll feel free to fill in the affiliation for you, rightfully or wrongfully. 

With that, I’ll open the floor to questions.  Please wait for the microphone.

Stanley Kurtz:  Yes, I’m Stanley Kurtz from the Ethics and Public Policy Center.  I read an interesting article in the latest Weekly Standard, by Henry Sokolski.  It raises an issue commented on here.  His argument is that we ought to build large oil pipelines that can take oil out of the Gulf without having to use the Straits.  In addition to being curious about your reaction to that article, what I really want to know is does this raise another military option?  If we could actually get the oil out another way, could we simply blockade Iranian access?

Patrick Clawson:  Well, since I put Henry up to sponsoring the initial study that led to that article, the answer is that it is quite inexpensive to bypass the Strait of Hormuz through a variety of mechanisms that aren’t that complicated.  The physics of oil pipelines are such that if you spend less than $1 per barrel, you can double the flow through pipelines by using surfactants, and the Saudis have a very large pipeline that crosses the Arabian Peninsula. 

The geography is very amenable to having a pipeline, which would cross the narrow point of the peninsula that sticks out and forms the Strait of Hormuz.  But if we wanted to stop Iran’s oil exports, there would be much simpler ways to do that.  Tom made mention of the tax on Iranian oil facilities.  A small part of Iran’s oil exports do not go through Kharg Island.  A great majority do.  Kharg Island is a very concentrated site.  The one pumping station on the mainland that pumps everything to Kharg Island is an even more concentrated site.  So if we wish to cut off Iran’s oil exports, it would not be such a difficult thing to accomplish.

Thomas Donnelly:  First, I would just say that bringing oil to market is inherently a vulnerable system, so you may be changing the military vulnerabilities.  The pipeline that went across Saudi Arabia would give the Saudis yet another piece of leverage, so I’m not saying that wouldn’t be a better choice, but it doesn’t really solve the problem.  It just changes the problem.

Michael Rubin:  Okay.  Two questions up front - Philip Dine from the St. Louis Post-Dispatch and then Maury Amate.

Philip Dine:  Hi.  To what extent does the situation in Iraq limit our military options, and at what point in the spectrum of those options are we likely to trigger a global terrorist response?

Thomas Donnelly:  There is no global terrorist response.  There are terrorists spread throughout the globe, but we should understand that a lot of groups have different political agendas.  It will produce an Iranian terror response or a Hezbollah terror response.  I think you just have to accept that.  Whether that will translate and will be a rallying point for semi-terror groups I think is a more opaque question.

On the spectrum that I set forth, I don’t think you really get into a military shortage problem.  You’ve got to understand that to make this situation would be the result of a crisis again.  The [indiscernible] that is in place today would be essentially wiped away, so you would be willing to take greater military risks.  I do not think it is until you get to the very high end of the spectrum that you raise questions of military shortage. 

There is certainly enough strike capability that the Air Force and Navy possess that are not being fully employed in Iraq.  Even if you’re doing a raid on a nuclear infrastructure, the forces are relatively small.  It would obviously be an imposition on Special Operations and Airborne Forces, but you could do it.

Danielle Pletka: Tom just gave you a military answer.  I want to give you a political answer to that question.  I do think there is a fundamental divide in Washington between how the military or Pentagon sees this question and how policy makers elsewhere in the government see it.  The policy makers look at the crisis scenario and think if we have to do it, we can.  What we hear on the basis of rumors is that they are far more flummoxed by the idea of this and spend a great deal of time thinking about how the Iranians would pay us back inside Iraq. 

What would their options be to pay us back in Iraq?  I think that has constrained a lot of creative thinking that could be going on.  It’s important to keep in mind that there are probably two sides of this, even in the executive branch.

Thomas Donnelly:  This isn’t rebuttal; it’s just an add-on.  I think the politics are going to be such that it will demand a Congressional resolution authorizing force.  I wouldn’t necessarily say we can draw a straight line from the current political environment to project how that would go.  The calculus that would put even the executive branch in a greater mind of military options would be something that would affect the larger political landscape.  But at some point, anything beyond a very limited set of strikes is a matter of politics, if not a matter of Constitution demanding a Declaration of War.

Michael Rubin:  Dani, can you tell Tom he’s wrong?

Danielle Pletka:  No, I don’t want to tell Tom he is wrong.  Tom made me think of something.  I apologize, but I hope it is useful and informative.  There are all sorts of legislation that passes or sits waiting at the desk in the House and Senate that is relevant to particular issues that “won’t ever go anywhere.”  The current political zeitgeist will never let it lead to passage. 

Then one thing happens.  I was struck when Tom mentioned the passage of Helms-Burton, which was related to Cuba.  It was never going to pass.  The Clinton Administration absolutely hated it and it was anathema to the political classes.  The moment that the Cubans made a decision to shoot down a Brothers to the Rescue aircraft – that legislation passed within a week and is now a law of the land.  There was no question about it.  Things can change overnight, and it’s important to keep that in mind.

Michael Rubin:  Again, I would emphasize the issue of misunderstanding what red lines are and how that can lead to what Dani is talking about.  Maury?

Maury Amate:  I’m Maury Amate [phonetic] of the Jewish Institute for National Security Affairs, among others.  Who is really calling the shots in Iran?  Is it Ahmadinejad?  Is it Khamenei?  Is it both, neither, or another group?  Who is making the policy decisions there?

Patrick Clawson:  There is a modestly collective leadership, but certainly Mr. Khamenei’s title may give you a hint of his power.  He is called the Supreme Leader.  There was a very nice interview of former President Khatami the other day in The Financial Times, in which he said that in Iran’s system the President doesn’t have much power.  That was more accurate than many things Mr. Khatami has to say.  The President is frequently the cheerleader in chief, whose job it is to speak loudly and give some indication of what the thinking of the Supreme Leader is. 

The last presidents were quite unsuccessfully in their programs to fundamentally change the Islamic Republic.  Mr. Rafsanjani wanted to make the Republic more focused on economic development.  Mr. Khatami wanted to do a lot of political reforms to rejuvenate the system.  Neither one of them were successful.  A simple minded extrapolation from the past would suggest that the current President’s efforts to return to Revolutionary values may also run into some problems.  But he certainly has a voice in decisions, and he has been quite effective at making use of the limited powers of the presidency. 

For instance, he has the power to make a lot of appointments, which has vigorously used to put his supporters in lots of positions.  The main decision to pursue the nuclear program in a more confrontational style seems to have predated his election, and to have been made by many in the elite.  Those opposed to this decision seem to be quite silent.  That certainly includes Mr. Rafsanjani and Mr. Khatami. 

When Mr. Khatami came to the United States, at one point there was a proposal for him to meet with Mr. Carter.  I thought that was terribly fitting because the attitude of the current Iranian government toward Mr. Khatami is rather like the current U.S. government attitude toward Mr. Carter.  The image that Khatami holds in Iranian public as a whole is rather like the image Mr. Carter holds in the American public.

Michael Rubin:  I’d just like to add one more general point here.  All too often, it seems that in the Washington press debate about policy and within the State Department, we get a little too distracted by the discussions of “factionalization.”  I want to underline what Patrick said.  In the Iranian system, it’s the Supreme Leader who matters.  Sometimes amplifying the factions can be a bit distracting and take our eyes off the ball. 

The other point I’d like to make is that all too often, especially in the public open source debate, people talk about Iran as a single unit.  Will Iran get the bomb?  What will Iran do if it gets the bomb?  It’s important to be precise here.  Within Iran, who are we talking about that would have the bomb?  Is it the Army?  No.  Is it the President?  No.  Are we talking specifically about the Revolutionary Guard in the office of the Supreme Leader?  Yes.  In reality, when people look at some of the Iranian diplomats talking about reform, they say maybe we can risk having a nuclear Iran. 

Maybe we can contain them.  We can fool ourselves into thinking it is Iran with the bomb, but in reality it is the Revolutionary Guard or the Supreme Leader with the bomb – the hardest line ideologues within the system.  I think we need to constantly underline that point.  Yes, sir?

Charles Perkins:  I’m Charles Perkins with APAC.  On the issue of the use of force, is there a case to be made that if a decision is ultimately made about the way we go, can the use of force be effective in actually changing Iranian decision making?  We can perhaps destroy Natanz, but if you go on the assumption that this simply delays the program and won’t influence their psychology, is there a point on this ladder of escalation that the Supreme Leader finds the use of force so painful that he changes direction?

Thomas Donnelly:  I would be really leery of trying to calibrate a signaling effort, either by the threat of force or by the refine escalation of the use of force, to try to shape Iranian behavior.  The track record of that is almost uniformly miserable.  I think we would be negligent if we don’t look ahead down this road. 

If we start to go down the road of military force or even deploy in a way that is meant to intimidate Iran, you have to assume that you’re essentially going to war.  There will be day 1, day 2, and day 3, etc.  You have to try to assume that many consequences will be unanticipated and hedge against the war being longer and larger than you understand it to be.  If it isn’t already part of the long war to try to reshape the politics of the Middle East, it will become close to being the central front.  If you starting going over this hurdle, know where you are going to land.

Patrick Clawson:  I would agree with Tom.  One should make very cautious presumptions before one starts going down the route of use of force.  That said, let me just note that Iran has been pursuing a nuclear weapon for at least 18 years under the current revolutionary government, setting aside the Shah’s efforts.  That suggests that this is a persistent effort, but not a crash effort. 

This would be consistent with the argument that Iran is pursuing influence and prestige and not vital national security defense.  Iran does not seem to face a larger neighbor it would wish to invade and dismantle the country.  Its situation is quite different from that of Israel, Pakistan, or even North Korea.  Therefore, I would suggest it is quite possible that at a certain point the Supreme Leader may decided this is not a particularly cost effective way to pursue influence and prestige, and that the program should at least be frozen for a more pernicious moment.

Danielle Pletka:  I don’t really disagree with that.  To abandon the program would be a loss of prestige.  If you look at the lessons that they should derive from what is going on internationally, what they see is that countries that have nuclear weapons are in fact far more immune to the kind of threats we enjoy bandying about with little meaning – the “unacceptables” and “intolerables.” 

The barrier that we would have to leap over if we decide to act would be far higher if they had nuclear capabilities.  I don’t see a real downside in the offing for Khamenei or Ahmadinejad that would force them into that kind of a decision.

Patrick Clawson:  The Rafsanjani publishing the Imam’s letter at the end of the Iran/Iraq War was to say that Iran had decided in the Spring of 1982 to invade Iraq, and it spend 6 years and 230,000 dead in its invasion of Iraq.  It was an unsuccessful effort to bring an Islamic Republic to the country.  It had staked the Revolution’s very existence upon that war, and yet it abandoned the effort.  This is a regime which has been prepared to abandon what was the defining cause when it felt that outside powers were intervening against it. 

For all our talk about it being a Islamic theocracy, it’s worth remember this is also a regime that has a Council of Exigency, which has charged with the powers to set aside every commandment in the Quran if necessary.  That’s a pretty interesting form of theocracy.  It suggests to me that in fact they can face some unpleasant realities if they need to.

Michael Rubin:  I’m going to jump in on that one.  I’d like to highlight what I would call the “domestic hypothesis.”  Patrick highlighted how perhaps the chief goal of the Islamic Republic is continuation of the system and it’s willing to make pragmatic compromises with regard to the existence of that system.  While people discuss Iran and the Revolutionary Guard’s nuclear weapon related to us, Israel, and Pakistan, I would argue that it has everything to do with the continuation of the system. 

Under the Islamic Republic, legitimacy doesn’t come from the people.  Even if 90 percent of people are pro-Western and a few of those are reformists, it’s completely irrelevant.  They believe their legitimacy comes from a higher power and when they look at the demographic trends, they will see that demography is against them.  If they have a nuclear deterrent, then there is an impediment to anyone taking action.  This basically gives Iran a green light to take whatever action it needs to take in preservation of its regime.  Sometimes people in Europe talk about Europe as the China Model, but with the China Model can come Tiananmen Square, or 10 of them.  If there is a significant crackdown in Iran, it will be a lot harder to intervene if we have to consider that nuclear threshold.

Danielle Pletka:  We don’t want to keep going back and forth for your entertainment.  The only final point I want to make is that if Iran perseveres, they will have a nuclear weapon.  If Iran had persevered in the Iran/Iraq War, they weren’t going to win; at least that is my view of the conflict.

Michael Rubin:  Okay, I’m going to go off to the back.  This lady had a question.  Does she still have a question?  Just wait for the microphone.

Carol Giacomo:  I’m Carol Giacomo from Reuters.  I’d be interested in all of your responses to this question.  How likely is it that the United States will have to take military action against Iran?  And when is that likely to be?  Do we have a few years or is this something shorter term?

Michael Rubin:  I’ll start, and then we’ll go down the panel.  I think it’s becoming likelier with time, whether we want it or not, because some of the diplomatic options are failing.  When do I think this will occur?  Let’s put it this way:  When the decision lands on the President’s desk, by nature of decisions of this magnitude, there is never adequate intelligence at the time when the decision needs to be made.  It always comes a little bit too early for the comfort of the policy makers in Washington.  Likewise, while a lot of people can bandy about when this change will occur, in reality only about 6 or 7 people in Washington are going to know well ahead of time.  Therefore, I don’t think I’ll be among them at least.

I have just one other final point.  Often times, the National Intelligence Estimate of Iran being 5 to 10 years from developing a nuclear weapon is bantered about.  First, whenever the CIA says 5 to 10 years, that is CIA-speak for they don’t know.  Second, the devil is always in the details and if the details are about Iranian production of its own enriched uranium for the bomb, or Iran gets it from somewhere else, then all bets are off.

Thomas Donnelly:  I think the most likely scenario under which we would be compelled to intervene militarily is actually one we haven’t discussed.  This would be where there is a catastrophic loss of power by the current government in Iran.  A lot of what we would be concerned about would be the control of nuclear materials, particularly whatever enriched radioactive stuff they had.  We’ve been able to slowly accommodate ourselves to the idea of a fairly centralized and stable government in Iran, even as they’ve marched slowly towards nuclear capability.  I think we’ll find a way to find the unacceptable more acceptable than we are willing to admit. 

The one thing that really would be unacceptable would be a situation of chaos in which either nuclear weapons or materials were uncontrolled, particularly if they were in the hands of the Revolutionary Guard, who would be more likely to pass it along to elements outside Iran.  To me, that’s the thing that would really be a situation where to not act would have so many grave consequences.  It would be very challenging to a President to say no.  Looking at our behavior over the past six years, we have found what we declared unacceptable to be more acceptable.

Patrick Clawson:  I would disagree with that.  I would say that over the last 6 years, Iran’s program has proceeded at a snail’s pace, has not gotten very far, and has shown tremendous difficulties.  Had Iran proceeded at a more rapid pace, we would have had a national discussion about what is and what is not acceptable.  We have not had to have that because Iran’s program has not forced us to have that.  So long as Iran’s program continues to proceed at this snail’s pace, there is the prospect that geo-strategic circumstances will change against Iran. 

Iran is now in the situation of the man with the leaky roof when it’s not raining.  He sees no reason to go out and fix the roof.  The day is going to come when it’s going to be raining, and he’s going to be in big trouble.  The Iran situation will be much less advantageous geo-strategically.  At that point, I suspect Iran may well have to compromise, but we would have a big national debate if Iran’s program were proceeding. 

My reading of that debate is that there is no stomach anywhere in the United States, the Arab world, or in Europe for deterring Iran.  Nobody is prepared to put forward the very substantial military assets and political alliances that would be necessary to deter Iran over a sustained period of time.  Because we do not see any willingness on the part in Europe or our Middle Eastern allies to deter Iran, the alternative would be rapid proliferation throughout the region and many nuclear states in the Middle East.  This is not acceptable to the United States.  Unless we see some willingness on the part of our European and Arab friends to vigorously participate in the deterrence of Iran, I don’t think the United States would be prepared to live with a nuclear Iran.

Danielle Pletka:  Carol you’ve heard me say this before.  We have a fundamental problem, I think.  That is that during the first 4 years of this administration, people really believed what the President said he was going to do.  In the last couple of years, they have come to view his rhetoric as little more than rhetoric without a policy or an action plan to back it up.  Having crossed the threshold with North Korea, we discovered that it really wasn’t the exciting event that we all thought it would be.  They exploded a nuclear device and life has gone on. 

The only sense in which this matters to the Iranian calculus on our side is that once you say something is unacceptable or intolerable, and then you accept it or tolerate it, it becomes much easier next time to accept or tolerate it.  While I do agree with the way all my colleagues see this as a problem cornered by a lack of others interfacing a black and white decision - two years ago I would have said the President has told everybody it is unacceptable for Iran to have a nuclear weapon, and the United States will not tolerate it.  He continues to say that to this day, publicly and privately to foreign leaders and his own staff. 

You know what?  I don’t really know what that means anymore.  If I don’t know what that means, I’m betting that the Iranians and others think they have a lot more leeway to go in the direction they want to go in.  That does a big risk to us.  The $64,000 question:  Is it a risk that we will not tolerate?  I don’t know.

Michael Rubin:  There was a question over here and then in the back.   Yes, right here in front of the camera.

Male Voice:  My name is Dominguez [indiscernible] and I’m with MKL Associates.  I just want to see if anyone on the panel would want to speculate.  What will be the reaction of China and Russia should the U.S. come to a point where it had to contemplate intervening along these military options that were discussed here?

Patrick Clawson:  I think the answer is entirely dependent on the situation.  If after many years of insisting that its nuclear program is an entirely peaceful program, Iran were to withdraw from the NPT and announce it has in fact started a military program and testing a nuclear weapon – in that context, if the United States were to use military force, the reaction of a great many people around the world would be, “Duh, what did you expect?” 

I’m reminded of what happened in 1988 when the United States entered the Iran/Iraq War on Iraq’s side because of the intelligence we provided to the Iraqis.  This was central to their considerable battlefield victory at Faw, followed a few days later by the shoot-down of the Iranian air bus.  This was widely interpreted by Iran as our joining of the war on the Iraqi side.  The response by Iran eight days later was to accept the cease fire, ending a war that killed almost a million people.  We did not pay a heavy price with the Iranian people because of the sense that it was their government’s fault. 

My reading of the debates going on inside Iran now is that the United States is not being blamed for the hardship caused by the increased sanctions.  It’s their government’s fault.  If this situation were to be that it was perceived around the world to be the Iranian government’s fault, then the U.S. use of military force would be relatively well accepted by the international community.  In this, we have President Ahmadinejad on our side.  The Fourth Imam had a wonderful prayer.  He said, “Praise be, oh Lord, for granting us such stupid enemies.”  I think Mr. Ahmadinejad falls within that category.

Michael Rubin:  I would add that China specifically has a tendency to abstain at the UN Security Council.  But if the United States and the President thought this really was in our national interest and was willing to use military force, I’m not sure that anyone would be willing to sacrifice our effectiveness upon the altar of multilateralism if we don’t see it as leading to a solution.  The next question is in the back.

Female Voice:  My name is [indiscernible].  I’m from Radio Farda.  As you know, we radio broadcast to Iran 24 hours a day.  I got an interesting email over the weekend from one of our listeners stating that they are sick and tired of listening to the nuclear issue.  The nuclear issue for the people of Iran is not an issue.  He was arguing how this was a Western issue and a U.S. issue.  I’d like to get the panel’s reaction to our audience.

Michael Rubin:  Very briefly, I will add that Iran has cast this in terms of a domestic energy issue and the right to have nuclear power.  However, when a Tehran think tank recently asked the poll question a different way:  Would you sleep better if your government had nuclear weapons?  Two-thirds of Iranians surveyed said no, they would feel less secure.  Bill Sarni documented this for Radio Free Europe.  It is an international issue.  Iran has made it an international issue.  Whether or not that particular listener feels it is, may be beside the point in this case.

Patrick Clawson:  Indeed all politics is local.  Most people in Iran are probably more concerned about whether or not Iran is going to get kicked out of the International Soccer League because of government intervention in soccer decisions.  The burning economic problems, Ramadan, raging inflation, and the difficulties of affording meat are preoccupying at the moment. 

The question becomes to what extent does this government in Iran manage to persuade ordinary Iranians that it’s part of the problem in their daily lives?  Things like those widely publicized scenes of giving $10,000 to each of the people who lost their homes in southern Lebanon have not helped the Iranian government’s image with its own people.  Where is my $10,000?  I just think this Iranian government is going to have grave difficulties over time, having created such high expectations during the election campaign.  He’s not going to be able to deliver.  I think if we can postpone this nuclear issue over some years, this Iranian government is going to find itself in serious difficulty with its own people.

Michael Rubin:  For the last question up front.  Again, state your name and affiliation please.

Male Voice:  I’m [indiscernible] from the Foreign Policy Association.  From the faulty intelligence you had regarding Iraq before, how much do we know about the development of the nuclear weapon program of Iran?

Michael Rubin:  I’ll address this first very quickly.  We’re not just talking about the CIA’s misappraisal of Iraq in 2003.  I would also add to that list the misappraisal of India and Pakistan and of Iraq in 1991.  The biggest difference here though is that everyone is working from the same deck of cards.  Everyone is working from the inspection reports of the International Atomic Energy Agency, which have raised a significant number of questions and found Iran in noncompliance with its Nuclear Nonproliferation Safeguard agreement.  If you refer to their reports, they do raise questions of the overall disposition of uranium imported from China.  The question of what polonium was used for, the question of P2 centrifuges of highly enriched uranium contamination, which initially Iran had said was entirely domestic in origin. 

There are still unanswered questions with regard to A. Q. Khan and his relations with Iran.  There is likely the issue of ratification of the additional protocol of the IAEA, but perhaps I will flip the floor over to Danielle and Patrick.

Danielle Pletka:  I just want to say something really quickly.  I think that rogue leaders should learn a lesson from the invasion of Iraq.  If you want people to think you have weapons of mass destruction and act like you do, then you will be treated like you have weapons of mass destruction.  The same applies to North Korea.  People speculate about what they did.  They announced that they detonated a nuclear bomb.  We know now that it was, but the fact is that it doesn’t make a difference.  If you want to announce to the world that this is what you have, then you should expect to be treated as if you do.  I think that is a very important lesson that they haven’t quite figured out.

Patrick Clawson:  Since February of this year, Iran has ceased cooperation with the IAEA on the issue of the so-called additional protocol, and the additional inspections which they had agreed to.  That means we have lost knowledge of how many centrifuges Iran is producing each month, which they had previously provided us access to do.  That means that as every month goes by, the possibility that Iran has a covert clandestine centrifuge program increases. 

Our knowledge of what they may be doing on that basis decreases.  This is a big problem and it’s likely to grow over time.  Some of the most central aspects of the upcoming Security Council resolution are going to order Iran to cooperate once again with the IAEA on the additional protocol, and on these additional inspections of centrifuge production.  If Iran fails to do that, there is the serious risk that they will go down the route that Dani is talking about.

Michael Rubin:  Tom gets 15 seconds.

Thomas Donnelly:  Thank you, Mr. Moderator.  You’re a gentleman and a scholar.  You also don’t want to get so lost in the weeds on this issue that you miss the larger development of Iranian aspirations for leadership, hegemony, or whatever term of argument we use for the region.  With its sponsorship of Hezbollah and other terrorist organizations, we would have a huge problem with Iran, even if you eliminated the nuclear program entirely. 

Our overall strategy for dealing with Iran and its current position in opposition to our attempt to liberalize and democratize the governments of the region is a huge problem.  It’s as large a problem as the retrograde policies of various Sunni governments around the region.  That would exist whether there was nuclear program or not.  To me, that is the larger issue.

Michael Rubin:  I want to thank all of our panelists who are up here today and have raised a number of issues to consider as we move forward.  I would especially like to thank Omeed Jafari, who did an excellent job of putting this panel together and designing it.  I’d also like to thank the other research assistants and AEI staff who have been helping with the microphones, and everyone here.  Thank you.

[Applause]

[End of transcript.]