Representative Steve Russell of Oklahoma has introduced legislation to require the President to personally certify that named Iranian entities receiving sanctions relief are no longer involved in state sponsorship of terrorism. House Resolution 3662, the Iran Terror Finance Transparency Act, would also ban certification of financial entities with ties to the Iran Revolutionary Guards Corps (IRGC), ” or any of its agents or affiliates whose property or property interests are blocked pursuant to the International Emergency Economic Powers Act (IEEPA).”
This bill could have significant effects on the elimination of sanctions pondered by the Iran deal, as the IRGC has taken ownership of a vast swathe of Iran’s economy. As Ali Alfoneh of the American Enterprise Institute reported in his 2007 paper, “How Intertwined are the Revolutionary Guards in Iran’s Economy?”:
Within the Islamic Republic, and increasingly in Iran’s external trade, the IRGC is an economic powerhouse. From its modest postwar reconstruction activities, it has reconfigured itself as the dominant player in large infrastructure projects. It has sought to leverage its experience in defense industries to enter the lucrative consumer goods sector, even at the expense of private enterprises. Its involvement in the black market frustrates Iranian businessmen.
Throughout the 1990s, the IRGC also extended its influence into the lucrative oil and gas sectors.
This process only accelerated following the 2010 elections in Iran, with the IRGC moving to leverage its substantial assets accrued since the 1980s into ownership of many of Iran’s key economic assets. The IRGC used front companies to mask its extensive control of economic assets related to Iran’s nuclear weapons program. The use of front companies allowed an appearance of a number of independent entities going about their business unrelated, while in reality whole networks of these companies were being organized in their efforts to advance Iran’s nuclear program by the IRGC’s engineering corps.
Banning sanctions relief to IRGC companies thus could complicate the whole end-of-sanctions regime envisioned by the President under the Iran deal. Because HR 3662 requires the President to certify that a company receiving sanctions relief does not do business for on on behalf of the IRGC, the whole network of front companies would be barred from sanctions relief. In addition, any company doing business with any of those companies would have to be certified not to have continuing relationships with those firms. It is quite likely that the set of firms actually controlled by the IRGC or doing business with same, and the separate set of firms to receive sanctions relief under the deal, overlap nearly completely.
This points to a key flaw in the Iran deal’s design. The President and his diplomatic officers have moved to put an end to what are supposedly nuclear-related sanctions, but not terror-related sanctions. Yet it proves to be the case that an end to nuclear-related sanctions entails substantial sanctions relief for terror-supporting financial entities. Money is fungible, after all, and money that flows into IRGC-controlled entities can be used for terror support regardless of whether the money coming in relates to the nuclear-related activities that the Iran deal blesses.
Rep. Russell’s biography has set him on a collision course with the President on these issues. He was a decorated Infantry officer a decades-long career with the United States Army. He served most famously as battalion commander of the 1st Battalion, 22nd Infantry Regiment (“Regulars, By God”), a storied unit with a history dating to the war of 1812 that was deactivated by President Obama in 2014. Then Lieutenant Colonel Russell served in combat in Tikrit, Iraq, where his unit built relationships with the Sunni tribes that played a significant role in the capture of Saddam Hussein. It was this city, and those tribes, that recently suffered massive war crimes at the hands of Iranian-backed Shi’a militias that have flourished because of President Obama’s precipitous withdrawal from Iraq. Militias loyal to Iran including Hezbollah’s Iraqi branch destroyed the homes of Sunni leaders and kidnapped hundreds of civilians. Rep. Russell has also pressed the administration on its introduction of women into the Army’s Ranger School, of which he is a graduate, finding that the Army destroyed the records of the female cadets before they could be subject to Congressional oversight. Rep. Russell has promised to push to bring light to the questions surrounding the administration’s pressure on the military in this case.