Symposium - June 14, 2001
Q:Should the United States renew the Iran Libya SanctionsAct?

Yes: The Iranianterrorist regime poses a danger to the United States and itsallies.
ByKenneth R. Timmerman
       On June 2, a massive blasttriggered by a Palestinian suicide bomber ripped through a nightclubin Tel Aviv killing 20 people and injuring more than 80. Theterrorist groups Hamas and Islamic Jihad claimed responsibility. Bothgroups, which are affiliated with the Palestinian Authority of YasserArafat, are financed by the government of the Islamic Republic ofIran through official subsidies approved each year by Iranísstate parliament, or Majlis.
       Terrorists from Hamas andIslamic Jihad regularly travel to Iran, where they are trained byIranís Revolutionary Guards and by the Ministry of Informationand Security (MOIS) in bomb-making techniques. They are taught how touse false documents, pass border inspections and transfer moneyworldwide. They are instructed how to maintain clandestine contactwith their Iranian government handlers. Without state support fromthe Islamic Republic of Iran, terrorist attacks such as this latestsuicide bombing would be far more difficult.
       On April 12, 1996, theIsraelis arrested Hussein Mohammed Mikdad, a Lebanese Shiite whosubsequently admitted that his Iranian handlers had instructed him tohand-carry a bomb onto an El Al flight originating in Tel Aviv. Theonly reason the Israelis caught Mikdad was his own incompetence.While preparing the bomb in his East Jerusalem hotel room, hesuffered the misfortune of setting it off in his own lap. Mikdadentered Israel on a forged British passport provided him by Iranianintelligence.
       The Israelis had less luckwith the Iranian-trained bomber who drove an explosive-rigged vaninto an Israeli bus in Gaza on April 9, 1995, killing seven Israelisand one U.S. citizen, a 20-year-old student from New Jersey namedAlisa Flatow. Lawsuits filed by her parents led a U.S. court tocondemn the government of Iran to pay her family $247.5 million indamages.
       Advocates of lifting U.S.sanctions on Iran argue that the re-election of a so-calledìmoderateî cleric, Mohammed Khatami, as Iraníspresident on June 8 will end the terror spree and that sanctions onlyreinforce his hard-line opponents. But since Khatamiís firstelection as president in 1997, he has met repeatedly in Tehran withthe leaders of Hamas, Islamic Jihad and Lebanonís Hezbollah.Iranís subsidies to these groups have continued unabated atthe rate of around $100 million per year. In fact, as Ministry ofIslamic Guidance in 1983, Khatami was one of the original founders ofthe worldwide Hezbollah movement.
       Last October, after onesuch meeting with Hamas terrorists in Tehran, Khatami proclaimed thatonly the annihilation of the state of Israel would bring peace to theMiddle East. ìThey are basically an occupying entity,îhe said of the Israeli government. ìNaturally, any governmentthat is based on oppression and injustice may stay in power for awhile, but ultimately it is doomed to failure. Ö Real peace canonly be achieved through an end to occupation.î
       Inside Iran, the reign ofterror has accelerated under Khatamiís presidency. Despite hisclaims to promote ìliberalization,î Khatamiíssecurity forces have closed reform-minded newspapers, assassinateddissidents and, in May, shut down Iranian access to the Internet.
       On the evening of Nov. 22,1998, mysterious intruders burst into the Tehran home of secularopposition leaders Darioush and Parvaneh Forouhar, hacking theelderly couple to death and sexually mutilating their corpses. Itturned out the murderers were members of Iranís securityservices, acting on orders from a top deputy of one ofKhatamiís key government ministers.
       Since the gruesome murderof the Forouhars, agents of Iranís security services haveexecuted another half-dozen secular writers. Despite his protests ofinnocence, Khatami has done nothing to stop such killings or torestrain the intelligence services from their reign of terror.
       On the contrary. In July1999, students at Tehran University revolted against domesticrepression and called for greater freedom. In response, the Tehranpolice stormed student dormitories, killing five students, includingat least one person thrown to his death from a three-story window.Instead of backing the students and their calls for reform, theìmoderateî Khatami called on students to end theirdemonstrations.
       Many of those who supportlifting U.S. sanctions on Iran argue that free trade would subvertthe radical Islamic regime by exposing ordinary Iranians to Westernculture. But Iranians are very sophisticated, thank you. Many of thecurrent regimeís leaders were in fact educated in the West.Tens of thousands of Iranians travel every year from Iran to theUnited States, while several times that number travel regularly toEurope and even to Israel. U.S. sanctions did not exclude the sale ofconsumer goods to Iran until 1995. The reason Western notions offreedom and free trade do not flourish in todayís Iran is notbecause they are foreign concepts, but because the regime hasdemonstrated again and again that it brutally will quash anychallenge to its monopoly on power.
       Opponents of U.S. sanctionson Iran include some of Americaís largest and most successfulmultinational corporations. They stand to gain billions of dollars inpotential trade should they succeed in getting sanctions lifted. Putpolitely, their arguments emit a faint odor of self-interest.
       USA*Engage, originallyestablished in 1996 as a mouthpiece for Conoco and Unocal, claims theUnited States is ìshooting itself in the footî bymaintaining trade sanctions on Iran since foreign companies are morethan willing to fill the breach left by the U.S. boycott.
       There is some merit to thisargument. Russia and China are conducting cash-and-carry sales ofmodern weaponry and the strategic equipment Iran needs to buildballistic missiles and nuclear-power plants. Some U.S. companiesmight be tempted to follow in their path. U.S. sanctions block thesecompanies from pursuing sales that clearly violate our nationalinterests. If that is shooting ourselves in the foot, then we shouldkeep shooting.
       Other countries such asFrance, Italy, Germany and Japan clearly want to help Iran developits oil and gas fields. But the lack of laws to protect foreigninvestment in Iran has helped deter many companies from committingmajor capital to such projects. Do U.S. oil companies want to investin Iran without protection? Are they prepared to send Americancitizens to work in Iranian gas fields while pro-regime thugscontinue to trample the U.S. flag on the streets of Tehran?
       Added to this high-riskenvironment are U.S. secondary sanctions, known as the Iran LibyaSanctions Act (ILSA), which is up for renewal this summer. ILSA waspassed in 1996 because the U.S. Congress and the Clintonadministration agreed it was not in our national interest to helpprop up the current regime in Iran by investing in its oil and gasindustry.
       The ILSA sanctions havehelped to deny Iran the technology and capital it needs to rebuildits oil and gas industries, which still account for some 90 percentof Iranian gross national product. New figures released in May by theInternational Monetary Fund show Iranís economy has shrunk by12 percent from its size a decade ago, despite surging oil prices.The figures also show Iran to be one of only 11 countries outsideAfrica and the former Soviet bloc where per capita income actuallyfell throughout the 1990s while the rest of the world experienced aneconomic boom.
       U.S. sanctions were not theroot cause of Iranís economic woes: Chronic corruption andmismanagement by Iranian government planners did the trick. But U.S.sanctions have made a significant contribution ó so much sothat the Iranian government lodged an official complaint with theInternational Court of Justice in 1996, accusing the United States ofeconomic ìsabotage.î
       Lifting U.S. sanctionsagainst Iran before significant changes are made in the repressiveand terrorist behavior of the Iranian regime only would encouragehard-liners to continue their assault on fundamental freedoms andhuman decency. Liberalizing trade amounts to a cash advance drawnagainst the hope of future good behavior by Tehranís rulingclerics.
       The previous administrationtried throwing sops to Tehran on several occasions without anyimprovement in Iranian government behavior. The ban on Americanimports of Iranian carpets, dried fruits, nuts and caviar was liftedlast year. Visa requirements were loosened and academic exchangesencouraged. Before that, the administration quietly allowed the saleof U.S. aircraft spare parts to Iran. So far, the Iranian governmenthas yet to make a single gesture in response.
       Iran continues to buildlong-range ballistic missiles while pursuing a clandestinenuclear-weapons program. A major influx of U.S. capital and advancedtechnology would give these efforts a shot in the arm.
       Instead of finding new waysof appeasing a bloodthirsty regime that wishes America no good, theUnited States should encourage democrats inside Iran to pursue theirquest to end the dictatorship of a radical, anti-Western clergy.Lifting sanctions might fatten the bottom line of a few selected U.S.companies, but it would do severe damage to our nationalsecurity.
Timmerman, a senior writer at Insight, is a formerwriter for Time and other journals. He repeatedly hastestified before Congress on issues concerning Iran.
No: Sanctions onlypunish American workers and weaken our nationalsecurity.
By ArchieDunham
       The Iran Libya SanctionsAct (ILSA) should not be renewed. I said publicly five years ago thatit should not be enacted; we now have five years of failed policy andineffective secondary boycotts against non-U.S. companies that provethe folly of this approach.
       You may think it odd that Ió representing an American oil company ó should opposea law that purports to level the playing field for us against ourinternational competitors. The fact is, ILSA doesnít help mycompany, and it certainly doesnít help my country. It is notthe highest moral choice, it threatens our national security and itdoesnít work because it is the wrong tool for the problem itis supposed to solve. Itís time for Washington to correct itsmistake and get to work on real solutions.
       Supporters of ILSAísrenewal claim this is the right moral choice, but I believedifferently. As I write this, I am in the Middle East. A suicidebomber in Tel Aviv has taken the lives of 20 innocent people. Myheart goes out to the families of these victims. It also goes out tothe families, known only to God, of those who may pay with theirlives if there is retaliation. When the vast majority of peace-lovingpeople in the world witness the atrocious acts of a violent few butseem powerless to exert their will over a small minority to stem thehatred and hostility, what can we do? When each new death, on anyside, only deepens the animosities and invites further violence, howdo we reverse the momentum and create sustainable conditions ofpeace, harmony and prosperity?
       I am excited that theUnited States stands at a crossroads in history where unrivaledopportunity intersects self-inflicted consequence. But how will wechoose? On the low road lies the invitation to be just anothercombatant, abandon whatever facade of evenhandedness remains andsupport the continuing hostilities with attitudes, words, threats,laws, penalties and even arms. We ride down this road on a highhorse, pointing an accusing finger and expecting others to be drawnto our ìprincipledî policy.
       On this path, Americanmorality looks false and empty, as it refuses to understand all sidesand to acknowledge the motivation of all interested parties. Weexpect to exert leadership from a distant fortress, and we disengagefrom the hard work of real diplomacy and real defense. We try topunish both friend and foe into toeing our line. This course isfutile. Who honestly sees any relationship between such behaviors andour nationís founding values and principles?
       On the high road lies theopportunity to lead with a human touch, to engage all sides indiscussion, to align exclusively with none and to support all whowork peacefully for the good of all. We offer our respect andlegitimacy, our active engagement ó including investments,diplomacy, aid and international institutional memberships.
       Americans like to think ofthemselves as a Godly nation. We therefore should preach a moralitythat stems from our common ancestor, Abraham, and that embodiesGodís commandment to love our neighbor ó even theunlovable one. This is characterized by a humility of which PresidentGeorge W. Bush often has spoken. If we lift up our nationísunifying values, we will draw all people to us, just as our economicsystem and democratic form of government now serve as a beacon forall yearning peoples.
       But if we try to punish,bully and coerce others into adopting our choices of behavior, wewill drive them away. Indeed, we are driving them away. If we try topush with hatred rather than pull with love, our hope for peace andmoderation will backfire. In my travels, I find to my dismay thatmuch of the world resents the power of the United States and is notconvinced that we use it responsibly and caringly.
       Renewing a sanctions lawthat has not worked and makes friend and foe both feel victimizedonly will convince a few million more people that we are uninformedof Middle East culture and values and are not committed to peace inthe region. ILSA may be aimed at foreign corporations, but it sends aclear and powerful signal about the prevailing American mind-settoward the world in general, not just toward two critical countriesin a region of vital national interest.
       ILSA threatens ourlong-term energy security. It offers a cheap domestic political vote,but it then damages a range of U.S. national-security interestsworldwide ó interests that all Americans share.
       Consider energy. Commercialactivity that discovers and distributes energy is a key U.S.national-security interest ó a fact that never is appreciateduntil supplies run short and a crisis descends. California, theworldís sixth-largest economy, is instructive. Beyond theblackouts yet to come (on the East Coast as well), Californians facechallenges to the public safety, business closures and departuresfrom the state, and potential new investors locating elsewhere toavoid the risks caused by inadequate energy supply and sourcediversity.
       California, long atrendsetting state, is suffering an energy shortfall that highlightsthe risks faced by the entire nation. Unless America moves quickly tosolve its energy-diversity problem, Californiaís predicamentcould surface in all 50 states. If ILSA is allowed to expire on Aug.5 ó as is legislated ó and the correspondingpresidential Executive Orders that prevent American companies frominvesting in Iran and Libya finally are rescinded, significantamounts of new energy will be available faster and more plentifullythan through any other means. The international-energy industryconsiders Iran and Libya the two most attractive countries in whichto develop new oil resources in the world.
       ILSA will not stop thosedevelopments from occurring, no matter what Congress passes, but itwill cause a trade war with Europe and seriously complicate diplomacyfor the president far beyond the Middle East. And, given the messagethis law conveys toward the Arab world, how will this action squarewith the hope for Arab producers to favor the United States withincreased production? It is a direct conflict. As always withunilateral sanctions, the only losers will be American consumers,workers, farmers and voters.
       Vice President RichardCheney correctly has emphasized that conservation will help, as willincreasing domestic-energy supplies. But such actions cannot balanceenergy supply when demand is increasing globally.
       ILSA doesnít work.It has not stopped terrorism or the proliferation of weapons of massdestruction. Nor has it achieved justice and compensation for the PanAm Flight 103 victimsí families ó the justificationsproffered for ILSA. In fact, many experts believe ILSA and, moregenerally, unilateral sanctions actually worsen these problems. Theyencourage the offending actors to establish relationships with othergroups and states that profess hostile anti-American ideologies orthat are eager to sell weapons and technologies.
       The notion that sanctionsdeprive these states of energy income that they might use fornefarious purposes is conventional wisdom that cannot stand scrutiny.Prices set by global oil markets nullify any impact of sanctions ongovernment revenues in Iran and Libya. While Iranís productionwas constant throughout the 1990s, its income doubled from 1998 to2000 in direct relationship to the world price of oil. Paradoxically,to whatever extent sanctions diminish global energy supply, they pushup prices, thus increasing the income of sanctioned states. Lawmakerswho wish to renew ILSA prefer to ignore these realities.
       Supporters of ILSA need tolook carefully at the larger world. Shocks to the global-energysystem seem increasingly probable. Because energy supplies are tight,a single shock at any point in the system will have significantnegative consequences on all parts and major effects on the mostvulnerable (high-consuming) parts unless additional supply iscreated.
       What if thesanctions-supportersí fantasies came true and Iranísgovernment fell? When that happened in 1979, 2 million barrels perday were wiped off the global market, sending oil prices to $45 perbarrel and causing a 2 percent drop in U.S. gross domestic product.Does any member of the U.S. Congress imagine that such a catastrophecould not happen again? Iran, with its population of 70 millionpeople, 70 percent of whom are under the age of 30, should be ourfriend, not our enemy. We certainly donít have an abundance offriends in the Middle East!
       ILSA is the wrong tool. TheMiddle East has many problems requiring real solutions, not phonypolicies offering punishment rather than processes that stimulatechange. If we are serious about combating terrorism, letís useinstruments that attack terrorism. If we wish to promote politicalchange, economic engagement is a proven, powerful tool, as Secretaryof State Colin Powell repeatedly has said. It offers a number ofhigh-road opportunities to re-establish broken relations withcountries whose interests ultimately are compatible with our own.
       To anyone prepared honestlyto understand Iran and Libya today, itís obvious that bothcountries wish to enhance their relations with the United Statesó not necessarily with our government, but certainly with theAmerican people, whom they like. To any serious watcher of the MiddleEast, it is obvious that our Arab friends and allies increasingly arebecoming distant. They are becoming more aligned with those we chooseto demonize and victimize, and they reject our disengagement.
       Members of Congresscosponsoring the ILSA renewal bill should brace for some toughquestions from their constituents, who may find themselves in gaslines, in the dark or in suffocating heat or freezing cold. Let thoselawmakers explain why they lost the Middle East for ìthe rightsymbolic voteî or ìthe need to show resolve.î Seeif the American public buys it.
       The media often caricatureenergy companies as being greedy, with no concern for the nationalinterest. We are, of course, public corporations owned by millions ofAmerican shareholders. But first and most importantly, we loveAmerica. We profoundly believe the American spirit of free enterprisehas a major contribution to make toward promoting peace andprosperity around the world, and engagement always has been the bestapproach to diplomacy.
       Even if relations with Iranand Libya remain rocky, working with them, not against them, isessential to U.S. national security. It also is a moral and historicimperative. ILSA is the low road. Letís take the highroad.
Dunham is president and chief executive officer of Conoco Inc., aninternational energy company in Houston, and is a longtime critic ofunilateral sanctions.


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