Obama administration takes back seat on Iran sanctions (LA TIMES) By Paul Richter WASHINGTON 02/18/12)
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Congress and Europe have been much more aggressive in punishing Iran
for its alleged nuclear weapons program.
Despite the Obama administration´s vows to cripple Iran with economic
sanctions, it is leaders in Congress and Europe who have seized the
lead in the West´s long-running campaign to punish Tehran for its
suspected nuclear weapons program.
In recent months, the toughest moves to deter Iran from pursuing its
presumed nuclear ambitions have come from a bipartisan group in
Congress and European allies, especially Britain and France. The
White House at first resisted these steps before embracing them as
The administration has imposed dozens of sanctions on Iran since
2009, but it has carefully calibrated their effect. Officials fear
that too powerful a blow to the world´s third-largest oil exporter
could cause an oil price increase, damaging the global economic
recovery, undermining international support for the sanctions
campaign and creating political trouble in an election year.
For example, top administration officials late last year were
strongly resistant when Congress slapped Iran´s central bank with
harsh sanctions. The European Union then went further, however,
imposing an embargo to halt purchases of Iranian oil by European
nations over the ensuing five months.
This month, Congress began crafting legislation that would
essentially cut Iran out of the global clearinghouse for
international financial transactions known as SWIFT, or the Society
for Worldwide Interbank Financial Telecommunication. The far-reaching
step could inflict severe damage to Iran´s economy by restricting the
ability of banks and other institutions to move funds in or out of
On Friday, SWIFT announced that it was "ready to implement sanctions
against Iranian financial institutions" in response to new
regulations the EU is set to enact.
Mark Dubowitz, an energy expert who has been advising Congress on
sanctions, said the Obama administration has tried to add
sanctions "in a measured way to assure international support and to
avoid anything that would spook oil and financial markets."
But as concern over Iran´s nuclear progress has intensified, members
of Congress, with support from the French and British
governments, "have really taken the lead in being aggressive," said
Dubowitz, who is executive director of a pro-sanctions group called
Foundation for Defense of Democracies.
The latest sanctions clearly are having an effect. In recent weeks,
the value of the Iranian currency has plummeted and prices for food
and other consumer goods have soared, causing hardship for ordinary
Iranians and putting political pressure on the regime.
A major crisis with Iran carries political risks for the White House.
A war or other disruptive event that causes a sharp rise in oil
prices could endanger the United States´ fragile economic recovery
and probably President Obama´s chances for reelection.
As a result, the White House has had to scramble to keep up with the
pace set by Congress and the Europeans. While critics have long
accused Obama of "leading from behind" by empowering other countries
to carry out America´s bidding on world crises, the administration is
now trying to avoid the appearance of "following from behind."
Administration officials insist they have been aggressive on Iran.
They point to their latest action, an announcement Thursday that the
U.S. will blacklist Iran´s Ministry of Intelligence and Security for
its support of Syrian President Bashar Assad´s brutal repression of
opposition protests, as well as for its backing of militant groups
Hamas and Hezbollah.
"Sometimes the folks involved in this on the Hill don´t appreciate
all the knock-on effects these things can have on the U.S. economy,
the world economy, the oil markets.… Sometimes it looks easy to use a
sledgehammer, and we have to come in and say, ´Let´s figure out how
to use a scalpel,´ " said a senior administration official who asked
to remain anonymous while discussing negotiations.
But U.S. lawmakers have a different, more pointed perspective. Highly
sensitive to Israel´s fears of a nuclear-armed Iran, they argue that
because Iran is finally feeling the pain of sanctions, now is the
time to pile on more.
Some members of Congress hope to force the ouster of the regime in
Tehran, although that is not U.S. policy, while others hope more
sanctions will persuade Israel to forgo a military strike. Either
way, lawmakers of both parties and both chambers have voted
lopsidedly, on vote after vote, in favor of action.
When Congress began devising central bank sanctions last fall,
Treasury Secretary Timothy Geithner met key lawmakers and made an
emotional plea for them to change course. The Senate voted 100 to 0
to press ahead.
"The Obama administration was, in fact, inclined to continue a kind
of incremental ratcheting of sanctions, but thanks to one of the most
universal votes we´ve seen in a divided Capitol Hill in several
years, the administration was really forced to move forward with the
decision to sanction the central bank," said Suzanne Maloney, an Iran
specialist at the Brookings Institution´s Saban Center for Middle
When Obama signed the legislation in December, he added language in a
signing statement suggesting that the administration might delay
implementation. Yet the administration has more recently publicly
embraced the sanctions as a viable tool.
The administration had considered trying to sever Iran from the SWIFT
system, which is used by the world´s major financial institutions,
even though no country has ever been cut from SWIFT. But it worried
that such a move might encourage other countries to try a similar
tactic to isolate adversaries in the future. Officials also were wary
of adding more pressure on Iran before it was clear how much damage
earlier sanctions could do, congressional aides said.
When the Senate Banking Committee began preparing legislation on
SWIFT, a Treasury Department official met with aides to ask that it
be watered down. After the committee adopted the original language,
the administration then changed course and voiced support for the
Some lawmakers also say the administration is not tough enough in
This week, it issued guidelines on how it will determine whether
countries have sufficiently cut purchases of Iranian oil, as required
under U.S. sanctions passed last year, in favor of other oil
Sens. Mark Steven Kirk (R-Ill.) and Robert Menendez (D-N.J.) argued
that the administration should set a specific goal. But the
administration rejected that notion, preferring more latitude to
decide whether to punish Iranian customers who are also key American
allies, such as Japan and South Korea.
Crunch time will come in June when the administration must decide
whether to punish nations that haven´t complied. U.S. officials could
still waive the rules if they determine sanctioning those nations
would create unacceptable damage to the world economy.
But going easy in a campaign year may subject Obama to political
attacks that he is weak on Iran and indifferent on Israel.
"It´s going to be a moment of truth," said Dubowitz of the pro-
sanctions advocacy group. (Copyright © 2012 Los Angeles Times
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