Israel Violates Economic Sanctions Against Iran

Israel's Rich -- but nutty -- history

by , February 11, 2010

The Obama administration is escalating economic sanctions against Iran.  Administered by a secretive unit within the US Treasury Department, they will freeze the assets of Revolutionary Guard Gen. Rostam Qasemi as well as four subsidiaries of a construction firm that he leads.  These sanctions build upon existing U.S. unilateral sanctions targeting shippers, financial institutions, and elements of the Guard Corps some believe are promoting Iran’s missile and nuclear programs.

Economic warfare expert R. Thomas Naylor extensively documents that such sanctions create black markets and spread corruption while doing relatively little to deter rogue regimes.  Obvious economic dynamics create vast margins for smugglers and traders willing to bust embargoes.  Unless the economy of a target country is particularly dependent upon the influence or volume of goods from any single international partner, profiteers quickly step into the breach.  Sanctions typically punish legitimate traders while favoring corruption around the world.

That corrupting nature of sanctions reaches far into the US.  One example is Marc Rich, indicted in the United States on federal charges of illegal oil deals with Iran during the Iran hostage crisis.  Rich broke US embargoes by purchasing Iranian crude under special deals with Ayatollah Khomeini.  Rich then sold them at healthy margins to legitimate traders locked out of the market by US sanctions.  Forbes ranked the intrepid Rich as the 242nd richest American in 2006 with a net worth of US $1.5 billion.

Rich stayed outside the U.S. until he arranged for an unprecedented pardon from President Bill Clinton on January 20, 2001. Eric Holder, then acting as deputy attorney general, gave Clinton his “neutral, leaning towards favorable” recommendation to pardon the Switzerland-based fugitive financier after a quiet and intense campaign by the Israeli government’s Ehud Barak and Shimon Peres and the US Israel lobby.

But the temptations of sanctions busting aren’t an “elites only” affair.  Under the highly problematic US-Israel Free Trade Agreement, US growers should have an advantage in supplying the $20 million Israeli pistachio market.  But grower complaints meticulously documented in 2007 to the US Trade Representative reveal that Israel prefers to avoid importing American nuts while violating its own “Trading with the Enemy Act” by purchasing Iranian pistachios through Turkey.  Although US growers supplied scientific test data to the US Trade Representative validating these claims, no punitive measures have been taken by Israel or the USTR (an office of the President).

History suggests that Israelis and their US lobby’s financial backers will be first in line to violate so-called “crippling sanctions” against Iran, a country over which the US has relatively little direct economic leverage.  This adds insult to injury, since a real US economic sanctions regime — likely to have been highly successful in averting conditions underlying any potential Middle East nuclear arms race — has been suppressed since it was signed into law over three decades ago.

The Foreign Assistance Act of 1961 as amended by the Symington Amendment of 1976 and the Glenn Amendment of 1977 prohibited US military assistance to countries that acquire or transfer nuclear reprocessing technology outside of international nonproliferation regimes. Israel, unlike Iran, is not a signatory to the Nuclear Non-Proliferation Treaty. The declassified US Army report titled The Joint Operating Environment 2008identifies Israel as a nuclear weapons power in "a growing arc of nuclear powers running from Israel in the west through an emerging Iran to Pakistan, India, and on to China, North Korea, and Russia in the east."  Jimmy Carter became the first former President to confirm in 2008 that Israel had secretly financed, developed, and deployed an undeclared arsenal of nuclear weapons. Israeli Mordecai Vanunu long ago released his damning photos of Israeli nuclear weapons and facilities for which he served 18 years in prison. 

If the President wishes to disburse US taxpayer-funded foreign aid to Israel in compliance with US law, he may do so only by issuing a special waiver, available for public review, as is currently the case with US aid for Pakistan.  Yet every president from Ronald Reagan to Barack Obama has violated their oath of office — all refused to either withhold aid or sign the short presidential waiver that would make delivering taxpayer funded US foreign aid to Israel legal under Symington and Glenn.

If US presidents had faithfully executed this US law in order to reign in the Israeli nuclear weapons program since in the 1970s, there can be little doubt that the Middle East would be a vastly better place.  Israel is fully dependent on access to the US market, diplomatic cover, and vast military aid.  Israel would have been motivated to negotiate in good faith a comprehensive peaceful settlement with its near and distant neighbors, none of which would feel pressure to establish a deterrent to Israel’s nuclear weapons.  But in terms of political coercion, Israel’s arsenal is pointed squarely at the US.  Back in 1960 the CIA estimated [PDF] that "Possession of a nuclear weapon capability, or even the prospect of achieving it, would clearly give Israel a greater sense of security, self-confidence, and assertiveness…Israel would be less inclined than ever to make concessions…"

The presidential history of capitulation to Israeli violators unmasks these new economic sanctions for what they truly are: corrupt “box checking exercises” as Israel’s lobby eagerly drives the US toward yet another needless — but long planned — military conflict which serves no legitimate American interest.

Read more by Grant Smith