[Senate Hearing 109-679]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 109-679
 
                A NUCLEAR IRAN: CHALLENGES AND RESPONSES

=======================================================================

                                HEARING



                               BEFORE THE



                     COMMITTEE ON FOREIGN RELATIONS
                          UNITED STATES SENATE



                       ONE HUNDRED NINTH CONGRESS



                             SECOND SESSION



                               __________

                             MARCH 2, 2006

                               __________



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                     COMMITTEE ON FOREIGN RELATIONS

                  RICHARD G. LUGAR, Indiana, Chairman

CHUCK HAGEL, Nebraska                JOSEPH R. BIDEN, Jr., Delaware
LINCOLN CHAFEE, Rhode Island         PAUL S. SARBANES, Maryland
GEORGE ALLEN, Virginia               CHRISTOPHER J. DODD, Connecticut
NORM COLEMAN, Minnesota              JOHN F. KERRY, Massachusetts
GEORGE V. VOINOVICH, Ohio            RUSSELL D. FEINGOLD, Wisconsin
LAMAR ALEXANDER, Tennessee           BARBARA BOXER, California
JOHN E. SUNUNU, New Hampshire        BILL NELSON, Florida
LISA MURKOWSKI, Alaska               BARACK OBAMA, Illinois
MEL MARTINEZ, Florida
                 Kenneth A. Myers, Jr., Staff Director
              Antony J. Blinken, Democratic Staff Director

                                  (ii)

  


                            C O N T E N T S

                              ----------                              
                                                                   Page

Biden, Hon. Joseph R., Jr., U.S. Senator from Delaware, opening 
  statement......................................................     8
    Prepared statement...........................................     9
Clawson, Dr. Patrick, deputy director for Research, the 
  Washington Institute for Near East Policy, Washington, DC......    16
    Prepared statement...........................................    19
Lehman, Hon. Ronald F. II, director, Center for Global Security 
  Research, Lawrence Livermore National Laboratory, Livermore, Ca    10
    Prepared statement...........................................    13
Lugar, Hon. Richard G., U.S. Senator from Indiana, opening 
  statement......................................................     6
Santorum, Hon. Rick, U.S. Senator from Pennsylvania..............     1
    Prepared statement...........................................     4
Takeyh, Dr. Ray, senior fellow for Middle Eastern Studies, 
  Council on Foreign Relations, Washington, DC...................    24
    Prepared statement...........................................    27
    Responses to questions submitted by Senator Barbara Boxer....    50

                                 (iii)

  


                A NUCLEAR IRAN: CHALLENGES AND RESPONSES

                              ----------                              


                        THURSDAY, MARCH 2, 2006

                                       U.S. Senate,
                            Committee on Foreign Relations,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 10:40 a.m., in 
room SD-419, Dirksen Senate Office Building, Hon. Richard G. 
Lugar (chairman of the committee) presiding.
    Present: Senators Lugar, Biden, Boxer, Bill Nelson, and 
Obama.
    The Chairman. This hearing of the Senate Foreign Relations 
Committee is called to order. We apologize to the audience and 
to our first witness this morning for tardiness. The committee 
has been privileged, however, to have an intelligence briefing 
on the subject before us this morning with Ambassador 
Negroponte and we are grateful for his availability and that of 
his staff. Members will be moving from S-407 to this room 
quickly.
    But before I commence my opening statement and recognize 
the distinguished ranking member, I would like to recognize the 
presence of a very important colleague, Senator Santorum, who 
has offered legislation in this field. I would like to ask him 
to make his presentation at this time because he has other 
duties and responsibilities in addition to his coming before 
our committee.
    We are privileged to have you and I would like to recognize 
you at this time.

STATEMENT OF HON. RICK SANTORUM, U.S. SENATOR FROM PENNSYLVANIA

    Senator Santorum. Well, thank you very much, Mr. Chairman. 
I appreciate your indulgence in allowing me to testify and 
giving me priority status above the chairman and ranking member 
in being able to present such testimony. So thank you, and I 
appreciate you holding this hearing today. This is, as you are 
well aware, one of the most important issues facing this 
country and what we do in dealing with the problem--national 
security problem--that Iran is to this country.
    I do not have to remind you, Mr. Chairman, you are very 
well aware of the Government of Iran's track record of being a 
supporter of terror and treating its own people in a 
terroristic manner. Iran is a state sponsor of terrorism. Iran 
created Hezbollah, actively support Hamas, the Palestinian 
Islamic Jihad, and the Popular Front for the Liberation of 
Palestinian-General Command. Iran has been implicated in 
activities associated with al-Qaeda in the 1996 attack on U.S. 
military personnel at Khobar Towers in Saudi Arabia.
    Troubling of recent note is Iran's continuing involvement 
in Iraq, with some very disturbing news as to their involvement 
with the Supreme Council for the Islamic Revolution in Iraq and 
the organization's Badr Brigades, which, of course, leads us to 
be concerned about the manipulation of the Iraqi police and 
military forces.
    In addition to their actions on the terrorist front, the 
Government of Iran is no less known for its violations of human 
rights. The State Department's recent report on Iran notes the 
occurrence of summary executions, disappearances, extreme 
vigilantism, widespread torture, and other degrading treatment. 
I have had numerous people come and talk to me about the 
religious persecution that occurs in Iran.
    One thing you can say about Iran, they are indiscriminate 
in discriminating. They discriminate against Christians, Jews, 
the Biha'i, other Muslim sects. This is a very religiously 
intolerant regime.
    Again, another troubling aspect to Iran is their now very 
evident pursuit of a nuclear capability. This has been well 
documented and I will not redocument it.
    Mr. Chairman, I have asked that my full statement be made a 
part of the record, where I provide all that documentation.
    The Chairman. It will be placed in the record in full.
    Senator Santorum. Thank you, Mr. Chairman. The recent 27 to 
3 vote by the IAEA board to report Iran to the U.N. Security 
Council, in my mind, creates an opportunity here for the United 
Nations to look at sanctions as a way to chill to the fervent 
attempt by Iran to pursue their nuclear weapons capability. 
Obviously, it is not clear whether we can get the support of 
China and Russia and other members of the Security Council to 
support sanctions. Nevertheless, I think we should be pursuing 
that within the United Nations, and things such as a travel ban 
on Iranian leaders, a ban on international flights by Iran Air, 
a ban on receiving cargo carried by Iranian governmental-owned 
ships, and aggressive action to make sure the governmental 
leaders in Iran responsible for human rights abuses and 
executions are brought to trial. I think it is important that 
we stress with the United Nations that actions need to be 
taken.
    I would also suggest that the Congress needs to take action 
to show support for our President's policies with respect to 
Iran. We need to show that we are willing to take action at 
this time, that we are not just calling for the United Nations 
to do something, but that the Congress itself recognizes the 
threat that Iran poses to the security of the world and 
certainly our own national security, and that we should act in 
support of constraining Iran's ambitions.
    I, along with 60 other Members of the U.S. Senate, have 
supported S. 333, which is the Iran Freedom and Support Act. It 
calls for vigorous support for peaceful change in Iran. The 
Iran Freedom and Support Act, a bill I authored, has been 
referred to your committee and is currently under 
consideration, and I would urge you, Mr. Chairman, to report 
that legislation to the full Senate.
    The legislation seeks to make it harder for the Government 
of Iran to have access to foreign investment and revenues to 
support terrorist activities and to pursue nuclear activities. 
The bill also codifies sanctions, controls, and regulations 
currently in place against Iran by executive order. The bill 
declares that it should be the policy of the United States to 
support efforts for Iranian self-determination, in other words, 
free and fair elections.
    Finally, the bill authorizes $10 million for the assistance 
of prodemocracy efforts, although it is my intention to modify 
that in light of the fact that the State Department has come 
forward with a supplemental, hopefully inspired by this bill 
and others in the House, to fund prodemocracy efforts in Iran 
to the tune of $75 million. So our intention is to actually up 
the ante to $100 million. Some have asked whether this funding 
would make a difference in Iran and I would say the answer to 
that is really just to look at the composition and the 
demographics of Iran. A majority of Iranians were born after 
the Islamic Revolution in 1979. These young men and women have 
grown up under brutal oppression in conditions which they hate. 
These people are the folks that we must appeal to and try to 
enjoin in doing something about changing the governmental 
status within the country of Iran. These are folks who listen 
to Western media and broadcasts for news and they question the 
authority, as lots of young people do, and they are looking for 
greater individual freedoms. They are also technologically 
savvy and so there are ways in which to communicate and to 
gather support.
    The funds authorized in my bill would support elements 
within Iran who are dedicated to democratic values and respect 
for human rights and particularly the rights of women.
    So calling for free and fair elections, providing United 
States assistance, combined with the codification of sanctions, 
means that Iran's shaky economy could be exploited to advance 
the cause of freedom. Abbas Milani of the Hoover Institute 
notes that the private sector investments have virtually 
stopped, private banking is in severe crisis, and the 
government has been lowering interest rates.
    Others note some of the regime's surprising 
vulnerabilities. Despite its massive oil reserves, Iran has 
little capacity to produce gasoline or jet fuel, two important 
refined petroleum products. Iran also lacks the ability to 
develop and exploit its vast natural gas reserves.
    The international community needs to leverage these and 
other weaknesses to dissuade Iran's leaders from pursuing 
nuclear weapons. Together with smart sanctions, such as 
freezing the assets and confiscating the property of the 
regime's leaders, an overt policy declaration by the Congress 
that supports prodemocracy movements in Iran will encourage the 
forces of change within Iran.
    Finally, I want to emphasize that the Iranian Freedom and 
Support Act is a nonviolent way to bring about change within 
Iran. You hear lots of talk about the military option being 
left on the table and we cannot take it off the table. I would 
agree with that, but I think that does not mean that we are 
paralyzed to act, that we need to do some things and the 
Congress can act to support the prodemocracy forces within 
Iran. The administration has recognized that this can be 
pursued. I hope the Congress would step forward with this 
authorization and express its support for the Iranian democracy 
movement.
    I want to thank you, Mr. Chairman, and the ranking member 
for the ability to come here and testify before your committee 
and certainly urge your support for S. 333. Thank you.
    [The prepared statement of Senator Santorum follows:]

      Prepared Statement of Hon. Rick Santorum, U.S. Senator From 
                              Pennsylvania

    Chairman Lugar, Ranking Member Biden, and members of the committee, 
I appreciate your willingness to hold this hearing on recent 
developments in Iran, and I commend you for your efforts to highlight 
the many problems we are facing with the agenda of the Government of 
Iran. I also want to commend you on selecting a panel of outside 
experts who will add to the understanding of events transpiring in Iran 
and the ways that the international community can respond to these 
trends.
    Let me begin by reminding the members of this committee of the 
Iranian Government's dreadful track record. From its inception, the 
Islamic Republic of Iran has supported acts of terror inflicted upon 
innocent persons, and has systematically thwarted efforts to achieve 
peaceful relations among Middle Eastern countries. Iran has long headed 
the ``State Sponsor of Terrorism'' reports issued by the U.S. 
Department of State. Iran's support for terrorism is known all too well 
by Americans.
    Iran created Hezbollah, the terrorist gang behind the 1983 suicide 
terrorist attacks against U.S. military and civilian personnel in 
Lebanon, and actively supports Hamas, the Palestinian Islamic Jihad, 
and the Popular Front for the Liberation of Palestine-General Command, 
all murderous organizations with long histories of committing heinous 
acts against the civilized world. Iran, in cahoots with al-Qaeda, has 
been implicated in the 1996 attack on U.S. military personnel at Khobar 
Towers in Saudi Arabia. These groups kill civilians and work against 
the national security interests of the United States and our allies. 
Iran's reach into Iraq is also profoundly disturbing. Iran's connection 
to the Supreme Council for the Islamic Revolution in Iraq (SCIRI) and 
the organization's Badr Brigades means that Iran is able to manipulate 
Iraq's police and military forces.
    Iran's human rights violations are no less chilling. As described 
in the recent publication, ``Supporting Human Rights and Democracy: The 
U.S. Record 2004-2005,'' the Department of State reported that, in 
Iran, ``Summary executions, disappearances, extremist vigilantism, 
widespread use of torture and other degrading treatment remained a 
problem.'' It then noted, ``The Government continued to discriminate 
against and harass the Baha'i community and other religious and ethnic 
minority groups, including Jews, Christians and Sunni and Sufi 
Muslims.'' Finally, this report stated, ``The government continued to 
severely restrict worker rights, including freedom of association and 
the right to bargain collectively.'' In short, the Government of Iran 
oppresses its people and deprives them of the liberties enjoyed by 
citizens of Western democracies.
    Iran's nuclear aspirations are perhaps the most unsettling of all. 
While Iran is permitted to pursue peaceful nuclear research under the 
terms of the Nuclear Non-Proliferation Treaty (NPT), its record, 
including systematic deception over nearly two decades, leaves little 
doubt about the mullahs' real intentions. In November 2003, the 
International Atomic Energy Agency (IAEA) reported that Iran had been 
developing an undeclared nuclear enrichment program for 18 years and 
had covertly imported nuclear material and equipment. Furthermore, the 
IAEA reported that Iran had conducted over 110 unreported experiments 
to produce uranium metal and separated plutonium, and had possession of 
designs that clearly related to the fabrication of nuclear weapons 
components. In August 2005, following the election of the religious 
fanatic Mahmoud Ahmadinejad as Iran's President, Iran announced that 
the ongoing negotiations under the terms of the 2004 Paris Agreement 
brokered by the EU3 were ``unsatisfactory.'' Iran then announced it was 
resuming the conversion of raw uranium into gas for enrichment, and, in 
January 2006, the Iranians removed the IAEA seals on its enrichment 
plant in Natanz, a facility aided by the pariah scientist Dr. A.Q. Khan 
of Pakistan.
    The recent 27-3 vote of the IAEA Board to report Iran to the United 
Nations Security Council and the board's admonishment that Iran's many 
failures and breaches of its obligations to comply with the NPT and the 
absence of confidence that Iran's nuclear program is exclusively for 
peaceful purposes resulting from the history of concealment, should 
serve as a wake-up call for the world that Iran's nuclear ambitions 
cannot be ignored any longer. Iran's aggressive behavior and its 
concealment of ongoing nuclear activities can only mean that the 
Government of Iran seeks to enrich uranium for use in nuclear weapons.
    Unlike the junior Senator from New York, I believe that the EU3 
negotiations were beneficial in that they demonstrated to the world--
with the exception of Syria, Cuba, and Venezuela--that Iran's nuclear 
aspirations are not limited to peaceful nuclear research. These 
negotiations also set the stage for a successful reporting of Iran to 
the United Nations Security Council.
    Although it is not clear that China, Russia, and other members of 
the Security Council will support sanctions against Iran, nonetheless, 
smart sanctions should be discussed and debated by the Security 
Council. We do not want to punish the people of Iran, who seek 
democracy, but rather the oppressive and murderous regime in Tehran. 
The Security Council, therefore, should consider:
         (1) A travel ban on Iran's leaders;
         (2) A ban on international flights by Iran Air;
         (3) A ban on receiving cargo carried on Iranian Government-
        owned ships; and
         (4) Aggressive action to see that government leaders in Iran 
        responsible for human rights abuses and executions are brought 
        to trial.
    I have recently heard two very bothersome claims about Iran. The 
first was a television news anchor who stated, I am paraphrasing, ``The 
prodemocracy movement in Iran is like the anti-Vietnam war movement was 
in the United States in the 1960s and 1970s--a mile wide and an inch 
deep.'' The other observation was made by a senior U.S. Senator who 
concluded, again paraphrasing, ``There are no good options with regard 
to Iran.''
    I believe both are wrong. The prodemocracy movement is anything but 
feeble. The regime's own public opinion polls prove that the 
overwhelming majority of Iranians detest the regime, and want it 
changed. And many of our colleagues have worked hard to propose good 
options for dealing with the Iranian threat. Along with 44 cosponsors, 
I have introduced S. 333, the Iran Freedom and Support Act. It calls 
for vigorous support for peaceful change in Iran. The Iran Freedom and 
Support Act has been referred to this committee for further review and 
consideration. I urge you to report the legislation to the full Senate 
for debate and consideration.
    This legislation seeks to make it harder for the Government of Iran 
to have access to revenue and foreign investment--resources it can use 
to support terrorist organizations or pursue nuclear activities. The 
bill also codifies sanctions, controls, and regulations currently in 
place against Iran. The bill declares--as we surely should declare--
that it should be the policy of the United States to support efforts by 
the Iranian people to exercise self-determination over their own form 
of government. Finally, the bill authorizes $10 million in assistance 
for prodemocracy efforts.
    This bill is a modest step forward in supporting those prodemocracy 
forces in Iran that seek greater freedom and a better life for the 
Iranian people. Given the administration's recent commitment to provide 
$75 million to prodemocracy efforts within Iran, I intend to increase 
the level of funding authorized by my bill to $100 million.
    Some have asked whether the legislation would make a difference in 
Iran. I answer: Look at the demographics. A majority Iranians were born 
after the Islamic Revolution of 1979. These young men and women have 
grown up under brutal and oppressive conditions, which they hate. These 
are the people to whom the United States must appeal and support. These 
are the people who listen to Western media broadcasts for news, 
question authority, seek greater individual freedoms, and are savvy 
toward new technologies of communication. Time and time again, I hear 
that the youth of Iran looks to the United States and actively seeks to 
enjoy the freedoms of the West. The funds authorized by my bill would 
go toward supporting these and other elements within Iran that are 
dedicated to democratic values, respect for human rights and the rights 
of women.
    This public policy declaration and U.S. assistance, combined with 
the codification of sanctions, means that Iran's shaky economy could be 
exploited to advance the cause of freedom. Abbas Milani of the Hoover 
Institution notes that private sector investments have stopped, private 
banking is in a severe crisis, and the government has been lowering 
interest rates. Further, an estimated $200 billion in financial capital 
has left the country recently. Millions of Iran's people are 
impoverished or unemployed, and they need to know that we will help 
them.
    Others note some of the regime's surprising vulnerabilities. 
Despite its massive oil reserves, Iran has little capacity to produce 
gasoline and jet fuel, two refined petroleum products. Iran also lacks 
the ability to develop and exploit its vast natural gas reserves. The 
international community needs to leverage these and other weaknesses to 
dissuade Iran's leaders from pursuing nuclear weapons.
    Together with smart sanctions such as freezing the assets and 
confiscating the properties of the regime's leaders, an overt policy 
declaration by the Congress that supports the prodemocracy movement in 
Iran will encourage the forces of change within Iran. Another targeted 
sanction, suggested by Milani, would entail freezing the foreign assets 
of Iran's revolutionary foundations, through which the government's 
elites export their ill-gotten gains, and control business empires.
    Finally, I want to emphasize that the Iran Freedom and Support Act 
is a nonviolent way to affect change within Iran. Some have called for 
leaving all options--including military attack--on the table, but 
surely it is wise to support the people of Iran and provide financial 
assistance to prodemocracy groups inside and outside the country before 
we begin discussions on a military solution that is fraught with danger 
and unpredictable consequences for the entire region. I am encouraged 
to see that the administration has also made this a priority with the 
recent announcement to seek $75 million in supplemental funding for 
fiscal year 2006.
    Mr. Chairman and members of this committee, thank you for 
permitting me to testify at this hearing. I hope that the committee 
will give strong consideration to S. 333 and that it will report this 
legislation to the full Senate for debate.

    The Chairman. Well, thank you very much, Senator Santorum, 
for that testimony, and likewise for your leadership and that 
of other Members of the Senate who have been speaking out on 
this issue. I think that the general consensus among members of 
our committee in this hearing is the initiation of a very 
important study of one of the most crucial problems of American 
foreign policy. We must weigh carefully the elements of S. 333 
and other suggestions that members may have, including our 
administration. We are attempting diligently to stay on the 
same wavelength with the administration because these are 
delicate matters in which we all have informed and sometimes 
strong opinions.
    But yours is an important one, and I appreciate your 
introduction of the bill. It has been referred to our committee 
and it will be given very thoughtful and careful consideration.
    Senator Santorum. Thank you, Mr. Chairman.
    The Chairman. Thank you for coming.
    Senator Biden. Thank you, Senator.
    The Chairman. Let me now commence with my opening 
statement. I will recognize Senator Biden. Would the witnesses 
like to come to the table at this juncture, because you will be 
recognized immediately after these statements.
    [Pause.]

 OPENING STATEMENT OF HON. RICHARD G. LUGAR, U.S. SENATOR FROM 
                            INDIANA

    The Chairman. The Committee on Foreign Relations meets 
today to examine the challenges posed by Iran's campaign to 
acquire nuclear weapons. After more than 2 years of 
negotiation, Iran's recent decisions to limit International 
Atomic Energy inspections and to restart uranium enrichment 
present a fundamental challenge to global stability and efforts 
to prevent nuclear proliferation.
    If the international community cannot muster the 
cohesiveness and determination to stop the Iranian nuclear 
drive, we will have undermined the international 
nonproliferation regime, risked igniting a regional arms race 
in the Middle East, and allowed a government with close links 
to terrorist organizations to acquire nuclear weapons.
    Iranian leaders deceived the international community about 
their nuclear activities for more than 18 years. They have 
rejected compromises, and threatened to cut off oil and natural 
gas exports should the international community impose 
sanctions. According to State Department reports, the Iranian 
Government continues to be one of the primary supporters of 
terrorism in the world. Iran has provided funding, weapons, and 
training to Hamas, Palestinian Islamic Jihad, Hezbollah, and 
other designated foreign terrorist organizations.
    Shi'a-dominated Iran continues to infiltrate and harden 
divisions among the ethnic and religious groups in Iraq, making 
the consolidation of a unified Iraqi Government more difficult. 
Iran also supports a Syrian regime that has been implicated by 
United Nations investigators in the death of former Lebanese 
Prime Minister Rafik Hariri. Iran's President has explicitly 
threatened the existence of Israel, and has denied the 
Holocaust, among other inflammatory statements. Earlier this 
year, Iranian leaders incited Muslims to destroy embassies and 
consulates in response to cartoons published in the Danish 
press.
    These actions have underscored for the world the risks that 
would be associated with the Iranian Government's acquisition 
of nuclear weapons capability. When Senator Coleman, Senator 
Voinovich, and I visited the United Nations in February, I told 
the Security Council of the United Nations that if Iran does 
not comply with the U.N. resolutions and arms agreements, the 
Security Council must apply strict and enforceable sanctions. I 
emphasized that decisions delayed over the course of months and 
years may be as harmful as no decisions at all.
    As options are considered, however, we must assess the 
effectiveness of types of sanctions in achieving our 
objectives. We will ask our witnesses today if they can 
prescribe a set of sanctions that would both receive broad 
international support, but, more importantly, also alter 
Tehran's behavior.
    I am hopeful that our government is thinking several 
diplomatic steps beyond the immediate preparations for securing 
a positive vote in the Security Council.
    I look forward to the insights of our witnesses on other 
diplomatic steps that the United States and its allies should 
be undertaking. The world does possess economic and diplomatic 
leverage on Iran, but exerting that leverage will require 
sacrifice from individual nations, particularly those who buy 
oil and natural gas from Iran. For this reason, United States 
diplomacy must reach beyond the European nations that have been 
the primary negotiators with Iran.
    Our interest in considering sanctions is not in harming the 
Iranian people. Sadly, they are victims of a repressive regime 
that is increasingly corrupt and unresponsive. Iranians do not 
want their country to be an outcast among the world's nations. 
They deserve a government that is legitimate and devoted to the 
people's interests. There are reformers inside and outside of 
Iran who want to bring change. But we should be realistic about 
the possibilities for political transformation or internal 
regime change.
    We do not have indications that the unelected regime faces 
short-term political competition from a popular movement. But, 
nevertheless, we should seek opportunities to speak directly to 
the Iranian people and to improve our means of communicating 
with them. We should understand that, having lived through a 
brutal and devastating war with Iraq in the 1980s, most 
Iranians fear a return to war. This fear is being exploited by 
the government in its campaign to justify nuclear weapons and 
to distract Iranians from the economic hardships that they have 
faced for decades.
    Although Iranians are patriotic and proud of their 
identity, few have invested their loyalties in the unelected 
clerics who control power. Our message to the Iranian people, 
many of whom have a positive view of the United States and the 
West, should be that we do not want war. Rather, we want to see 
an economically reinvigorated Iran based on increased personal 
freedoms and interactions with the outside world. Pursuit of 
nuclear weapons by the Iranian regime is distancing the Iranian 
people from this goal.
    We are pleased to welcome this morning an outstanding panel 
with deep experience on Iranian issues. Dr. Ronald Lehman is 
director of the Center for Global Security Research of the 
Lawrence Livermore National Laboratory. Dr. Patrick Clawson is 
the deputy director for Research at the Washington Institute 
for Near East Policy. Dr. Ray Takeyh is the senior fellow for 
Middle Eastern Studies at the Council on Foreign Relations. We 
look forward to their analysis and their recommendations.
    Before we proceed, however, I would like to recognize the 
distinguished ranking member of the committee, Senator Biden, 
for his opening statement, and then I will recognize the 
witnesses in the order that I have mentioned you. I will 
mention at the outset that your full statements will be made a 
part of the record. You need not ask permission that that be 
the case. It will be the case, and we will ask you to proceed 
in any way you wish to bring enlightenment to us.
    Senator Biden.

 OPENING STATEMENT OF HON. JOSEPH R. BIDEN, JR., U.S. SENATOR 
                         FROM DELAWARE

    Senator Biden. Thank you very much, Mr. Chairman. I will 
ask unanimous consent that my entire statement be placed in the 
record because it mirrors--there is not a single thing you said 
I disagree with and I would be somewhat repetitious----
    The Chairman. It will be placed in the record in full.
    Senator Biden [continuing]. And add one point. Gentlemen, 
thank you so much for being here. We are anxious to hear what 
you have to say. There is an old expression: Big nations cannot 
bluff. I am not worried, but I am concerned as we deal with 
what is, obviously, a serious security problem, that we have a 
realistic assessment as best we can of what the consequences of 
certain actions or inactions will be.
    I am looking forward to you giving us some insight as to 
not only what options may be available, the prospects of 
keeping the international community together on this, but what 
the reaction, if you have a sense, among the Iranian people 
will be to certain of the things we may initiate as a nation.
    My instinct tells me that we underestimate the support for 
a nuclear Iran among Iranians of all stripes. They live in a 
pretty tough neighborhood. I suspect, even the democrats with a 
small ``d'', not necessarily pro-Western, there is not 
inconsiderable support for the nation. I would like your 
assessment, as we go along, as to what you think, beyond the 
frustration with the clerical domination of all levers of 
security power. How do they feel, the Iranians, even those who 
strongly oppose the present administration, the present 
government there, about the acquisition of a nuclear 
capability, weapons capability?
    What do you think the reaction would be to either sanctions 
that were consequential, if we could reach that conclusion 
internationally, and/or military action of any kind, from air 
strikes to physically embargoing their export of oil? So I hope 
you will talk about some of those things with us today and I 
look forward to your testimony.
    [The prepared statement of Senator Biden follows:]

  Prepared Statement of Hon. Joseph R. Biden, Jr., U.S. Senator from 
                                Delaware

    Mr. Chairman, I thank you for scheduling this timely hearing and 
also for arranging the intelligence briefing that we received earlier 
this morning.
    The world's effort to prevent Iran from developing nuclear weapons 
is entering a very delicate stage.

   Iran may accept the Russian proposal to turn Iran's uranium 
        hexafluoride into nuclear reactor fuel, and agree not to engage 
        in uranium enrichment or spent fuel reprocessing.
   If it does not do that, however, then the U.N. Security 
        Council is likely to take up the issue and begin an effort to 
        pressure Iran into meeting the demands of the International 
        Atomic Energy Agency.

    I support that effort and I believe we all have a vital interest in 
its success. Today's hearing may help us understand what that will 
take.
    The outrageous and confrontational statements by Iran's President, 
calling for the destruction of Israel and denying the Holocaust, have 
helped to focus minds on the prospect of a nuclear Iran. The EU-Three 
have grown frustrated by Iran's antics and are moving to ratchet up 
pressure on Iran. And Russia and China voted to report Iran to the U.N. 
Security Council.
    But pressuring Iran will not be easy. Tom Schelling warned us years 
ago that if you want to compel a country to do something, you must do 
more than threatening or applying pressure. You must also convince the 
country that if it complies, you will stop the pressure (rather than 
``moving the goal posts'' and demanding still more).
    Maintaining pressure won't be easy, either, because we need other 
countries to stand with us; we can't do this alone.
    And we need to understand Iran:

   Why does Iran want nuclear weapons, or at least the 
        capability to build them? What would it do with them?
   Are there significant differences of opinion among elite 
        groups? Between the leaders and the led?
   What sanctions might work, if we define success as either 
        convincing Iran to change its policy or making it much harder 
        for Iran to complete its nuclear programs?
   Would sanctions divide Iran, or unite it in support of the 
        current regime?
   Are there ways to reach out to Iran, without sacrificing 
        longstanding American interests in human rights, Middle East 
        peace, and counterterrorism?
   Are there ways to promote a dialog within Iran on whether 
        nuclear weapons will contribute to Iran's national security or 
        harm it?
   Are there ways to support the Iranian people, without 
        undermining the democratic forces that we want to help?

    There are no easy answers to these questions, but we have three 
fine witnesses today to help us grapple with these questions. I look 
forward to their testimony, Mr. Chairman.

    The Chairman. Thank you very much, Senator Biden.
    The Chair now calls upon the Honorable Ronald Lehman for 
his testimony. We are pleased, as always, to have you before 
the committee.

  STATEMENT OF HON. RONALD F. LEHMAN II, DIRECTOR, CENTER FOR 
     GLOBAL SECURITY RESEARCH, LAWRENCE LIVERMORE NATIONAL 
                   LABORATORY, LIVERMORE, CA

    Mr. Lehman. Chairman Lugar, Senator Biden, I am honored 
that you have asked me to join you again today. You have my 
written statement and if I build upon what you have said and 
what Senator Santorum has said I think I can be relatively 
brief and leave more time for discussion.
    You have asked me to address several issues with respect to 
an international response to the ongoing Iranian nuclear 
weapons program. My basic message is, time is running out, but 
we have to manage the time that is available and that will 
require that we keep our focus.
    More specifically, in the last month the board of governors 
of the IAEA has voted, nearly unanimously, to refer the Iranian 
noncompliance matter to the U.N. Security Council. This is a 
very important development. As you know, the Security Council 
has not yet acted on the issue of North Korean noncompliance. 
There are, however, a number of parallel diplomatic efforts 
under way. The European 3--the United Kingdom, Germany, and 
France--have been trying to engage with Iran. They reached an 
impasse, but my understanding is that after Iran was unable to 
agree to the Russian proposal that was being discussed this 
week, the EU3 will meet with Iran tomorrow and, as you know, 
the next board of governors meeting will be on Monday, March 
6--begin on Monday, March 6--and that additional information 
will be then forwarded to the Security Council for action.
    The United States has been supportive of these actions. But 
I think your question is, What do we really need to get done. 
There--I think there are three general points I would make. One 
is to emphasize what is really at stake, that this is, in fact, 
a serious matter. The second is to make clear what does need to 
be accomplished. Third is to provide viable options that can 
actually lead to practical solutions.
    Iran is not the only challenge to the Nonproliferation 
Treaty and Iran's nuclear weapons program creates dangers to 
more than the treaty. Still, the issue of NPT compliance is 
critical. If the international community fails to act now, much 
more than the NPT could begin to unravel.
    Senator Santorum has mentioned some of the problems in 
dealing with Iran and the other witnesses are going to discuss 
some of these issues. So let me simply say that we need to 
stress to the international community both the importance of 
the nuclear issue, but also how it fits into these broader 
considerations, both political and economic. The goal must be 
for Iran to give up its nuclear weapons program and to do so in 
a way that gives the international community real confidence 
that that has been done.
    Iran has had under way a covert and illegal activity, much 
of which it has not acknowledged except under pressure from the 
IAEA and others. The IAEA continues to express concern over the 
lack of Iranian cooperation in resolving these matters.
    Now, Iran in particular seeks to develop the ability to 
produce fissile material that could be used for nuclear 
weapons. Many people think that the issue is one of quantity, 
how much can they produce. The problem is if they are permitted 
to do the research and development on enrichment it will not 
only give them the capacity to, then, quickly move toward 
industrial production for weapons, but it also will mask 
activities that could be under way that are covert.
    So the international community--if I were going to say, 
what is the most positive technically related thing that has 
happened in recent months, it has been the almost uniform 
agreement among the international community that research and 
development must not be permitted if we are going to put an end 
to the risks that are associated with the program.
    You have asked me to comment a bit on what could the 
Security Council do and I am going to give you some specifics. 
I do not want to manage negotiations. This is a complex dynamic 
process. But I want to give you some things that I think could 
be done that would be of some value.
    One is that I think the Security Council needs to reaffirm 
its view, expressed at the head-of-state level by the Security 
Council in January 1992, that further proliferation is a threat 
to international security. The Security Council has been silent 
on this matter for too long.
    The second is I think the Security Council should make 
clear the existing and essential principle of international law 
that a state in violation of its obligations cannot escape the 
consequences of its violation simply through withdrawal. 
International law cannot survive if withdrawal becomes the 
``Get-Out-of-Jail-Free'' card for violations. This is something 
that I think that the Security Council needs to make clear.
    In the case of North Korea and again in the case of Iran, 
the threat of withdrawal is used to intimidate. We should not 
be intimidated by it. We should understand that we do not care 
if they withdraw; they have got to live up to their 
obligations. That is an issue.
    I think the Security Council should make it clear that if a 
party withdraws from the NPT, recognizing that sovereign states 
have a right to withdraw from treaties, that nevertheless 
withdrawal from the NPT is a matter of concern for the Security 
Council and ought to be considered immediately.
    I think the Security Council could make clear that these 
principles apply not only to the future, but to the existing 
cases that we are dealing with. I think that it would be, in my 
view, inappropriate not to name Iran specifically, and, in 
fact, I think they should strongly endorse at a minimum the 
measures that the IAEA Board of Governors have already called 
upon Iran to implement. In this case we are talking about a 
suspension of all enrichment-
related activity, including research and development. They need 
to deal with the fact that they have the research reactor that 
is moderated by heavy water, that could be used for a plutonium 
approach to weapons. And they need to implement the additional 
protocol.
    The IAEA has called for additional transparency measures 
that go beyond the norm, and I will come back to this question. 
But I think that these are things that the Security Council 
could and should endorse to make clear that the Security 
Council cares and has authority to act in this area.
    I think that Iran, in my view, is in violation of its 
central obligations. I think the Security Council needs to step 
up to that. I think the Security Council should call upon the 
members of the United Nations to be supportive of the IAEA and 
the Security Council conclusions on Iran.
    There are a number of points that I just want to make 
briefly. First, I want to commend the committee for bringing 
regional specialists here. As you know, one of my particular 
concerns is that in the post-cold-war era we have an even 
greater divide between the so-called functional experts, people 
who do nonproliferation as I do, and the regionalists. 
Everybody was something of a Sovietologist in the cold war, but 
now we are dealing with many more different cultures and I 
think the questions that Senator Biden raised at the beginning 
are very much at the heart of how do we understand these 
cultures so that we can deal with them more effectively.
    I want to emphasize, again, that we can talk at length 
about all the technical aspects of discrepancies and 
nondisclosures and things, but I think the important point to 
remember is that we should not be blinded by the fact that Iran 
has under way a nuclear weapons program and we need to look at 
it from all of its perspectives.
    The second thing is that you may remember that when we were 
working the North Korean problem we actually had an agreement 
that most people have forgotten, the North-South 
Denuclearization Agreement. We were actually rather proud of 
achieving that. But as you may remember, one of its provisions 
went well beyond the NPT. It called for no reprocessing and no 
enrichment on the Korean Peninsula.
    Now, at the time I referred to that as an NPT-plus regime 
and the point I tried to make was that Korea is a particularly 
dangerous place and business as usual in Korea is not adequate, 
and, therefore, I thought the North-South Denuclearization 
Agreement was a very important achievement.
    Now, interestingly enough, because we caught that North 
Koreans reprocessing there was a preoccupation with 
reprocessing and for a while people forgot that enrichment was 
also a concern. Then later, as we know, there was concern about 
enrichment. In Iran we have the opposite. People are focusing 
very, very much on the enrichment issue, and all I would like 
to say is do not forget reprocessing. The Iranians are putting 
a lot of effort into this and they are pursuing a number of 
different paths.
    Senator Santorum and Senator Biden have mentioned some of 
the issues and you have mentioned, Mr. Chairman, some of the 
issues related to stronger measures such as sanctions. I have 
got some of that in my written remarks. I think I agree, we all 
want smart sanctions. We have got to figure out what smart 
sanctions are. In the end, I think we do have to recognize that 
there is a chance we will fail. If we do fail, we do have to 
consider how we strengthen our defenses and how we shape and 
tailor deterrence to deal with the situation.
    My bottom line is this. I think people have not yet 
internalized how serious it will be if you have a nuclear-armed 
Iran. A whole series of paths will start to be pursued by a 
wide range of people. Some of that will be in the area of 
proliferation, but I think there will be political 
consequences, consequences for the international security 
architecture, how nations relate to each other, and there will 
be economic consequences.
    I would not be at all surprised to see these feed on each 
other, and the result could be very serious economic downturns, 
recession, perhaps depression, in some parts of the world or on 
a global basis, increased war and violence in these troubled 
regions. So again, Ben Franklin talked about the horseshoe 
nail. The IAEA findings may seem like a horseshoe nail, but 
there is a real war out there and I think we need to recognize 
this is very serious.
    Thank you, Mr. Chairman, members of the committee.
    [The prepared statement of Mr. Lehman follows:]

 Prepared Statement of Hon. Ronald F. Lehman II, Director, Center for 
   Global Security Research, Lawrence Livermore National Laboratory, 
                             Livermore, CA

    Mr. Chairman, distinguished members of the committee on Foreign 
Relations, I am honored that you have asked me to be here today. I 
appear as a private citizen and do not speak for any organization with 
which I am associated.
    You have asked me to address four questions about Iran's nuclear 
program:

          1. How can the United States work to ensure that, unlike 
        North Korea, the United Nations Security Council acts in a 
        meaningful and timely manner to deal with Iranian 
        noncompliance?
          2. Is the Iranian situation different from that of North 
        Korea, both with regard to issues bearing on noncompliance and 
        the potential for multilateral solutions?
          3. What actions might the Security Council take with regard 
        to Iran, both with respect to sanctions and incentives to bring 
        Iran back into compliance and ease international tensions 
        regarding its nuclear program?
          4. What other steps might the international community take 
        outside the Security Council?

    With respect to the ongoing Iranian nuclear weapons program, the 
United States and the international community need to stay focused. 
This effort will not end quickly. At home and abroad, we must resist 
diversions as well as divisive pressures. At the same time, dialog such 
as this hearing is vital to exchange information and to build sound and 
shared assessments.
    An effective international response to Iran's noncompliance with 
the Nuclear Nonproliferation Treaty (NPT) must be developed, 
particularly in the light of our experiences with North Korea. The key 
multilateral vehicle for dealing with the North Korean nuclear program 
is the six-power talks. The UNSC has not yet taken up North Korean 
noncompliance with the NPT. On Iran, however, the Board of Governors of 
the International Atomic Energy Agency (IAEA)--by a nearly unanimous 
vote--has referred the Iranian matter to the UNSC. After receiving 
additional information to be determined at the upcoming IAEA board 
meeting, Security Council consideration will begin. This follows 
efforts by three European Union members--Germany, France, and the 
United Kingdom--to persuade Iran to come into compliance. Russia also 
has made a proposal.
    The United States has been supportive of these and other 
international efforts. Many diplomatic efforts are underway. In my 
opinion, to ensure that the Security Council acts ``in a meaningful and 
timely manner,'' the United States and others need to:
          (1) Emphasize what is at stake;
          (2) Make clear what needs to be accomplished; and then
          (3) Provide viable options that lead to solutions.
    Iran is not the only challenge to the NPT, and Iran's nuclear 
weapons program creates dangers to more than the treaty. Still, the 
issue of NPT compliance is critical. If the international community 
fails to act now, much more than the NPT could begin to unravel. If 
allowed to become nuclear-armed, Iran is unlikely to be the last new 
nuclear weapons state in the Middle East or elsewhere. Many nations 
will alter their security arrangements and military postures to meet 
the new and more dangerous instability. Political advancement will be 
disrupted; a severe economic downturn is likely. Other witnesses today 
will underscore what is at stake. Security, prosperity, and freedom are 
at risk not only in the dangerous region of the Middle East, but also 
on a global basis. The United States needs to help everyone understand 
these likely consequences.
    The goal must be for Iran to give up its nuclear weapons program, 
and to do so in a way that gives the international community real 
confidence that that has been done. Confidence in success will involve 
a lengthy process of engagement that addresses more than technical 
compliance with IAEA safeguards. In the meantime, we need to keep our 
eye on the development that caused the current urgency. Iran has been 
seeking to acquire the ability to produce nuclear weapons usable 
materials. Much of this effort has been covert and illegal, masked by 
an extensive program of denial and deception. Iran has acknowledged 
some of this history, piecemeal, only after being confronted with 
evidence, but the IAEA has again expressed concern that after 3 years 
of intensive Agency efforts, key uncertainties have not been addressed 
due to lack of transparency.
    Iran wishes to continue the research and development necessary for 
an industrial scale production capacity of fissile material, and then 
it wants to begin such production. The problem, given the entire 
context of Iranian activities, is that to permit the research that 
gives Iran capabilities such as uranium enrichment with gas 
centrifuges, would be to provide both the basis for a parallel nuclear 
weapons program and the means to mask covert weapons activities or 
procurements and to break out of the treaty. The immediate step is to 
prevent the development or acquisition of such enrichment technology or 
other means to acquire weapons useable material.
    Undoubtedly, the Security Council will not act initially with the 
full range of powers that it has. Early on, however, the Security 
Council should make clear its concern and authority. Here are some ways 
in which it might do so.
    The U.N. Security Council needs to reaffirm its view, expressed by 
the U.N. Security Council Heads of State in January 1992, that further 
proliferation is a threat to international security. On the seriousness 
of proliferation, the U.N. Security Council has been silent for too 
long.
    The U.N. Security Council should make clear the existing and 
essential principle of international law that a state in violation of 
its obligations cannot escape the consequences of its violation simply 
through withdrawal. International law cannot survive if withdrawal 
becomes the ``Get out of Jail Free'' card for violations.
    Recognizing the right of sovereign states to withdraw from 
treaties, generally, the Security Council could make clear that any 
withdrawal from the NPT, in particular, is a matter that warrants 
immediate U.N. Security Council consideration.
    The U.N. Security Council could make clear that these principles 
apply not only in the future, but also to concerns presently engaging 
the international community.
    The U.N. Security Council could state that Iran, by name, falls 
under these principles.
    The Security Council could endorse measures in IAEA Board of 
Governors resolution (GOV/2006/14 of February 4, 2006, which ``deems it 
necessary for Iran to:

   ``Reestablish full and sustained suspension of all 
        enrichment-related and reprocessing activities, including 
        research and development to be verified by the Agency;
   ``Reconsider the construction of a research reactor 
        moderated by heavy water;
   ``Ratify promptly and implement in full the Additional 
        Protocol;
   ``Pending ratification, continue to act in accordance with 
        the provisions of the Additional Protocol which Iran signed on 
        18 December 2003;
   ``Implement transparency measures, as requested by the 
        Director General, including in GOV/2005/67, which extend beyond 
        the formal requirements of the Safeguards Agreement and 
        Additional Protocol, and include such access to individuals, 
        documentation relating to procurement, dual-use equipment, 
        certain military-owned workshops and research and development 
        as the Agency may request in support of its ongoing 
        investigations.''

    The Security Council could direct the IAEA to use all the tools 
available to it and to propose additional measures to help resolve 
matters of fact, and that the UNSC will support those actions including 
special inspections.
    The Security Council could find that Iran has violated central 
obligations under the Nuclear Non-Proliferation Treaty.
    The Security Council could call upon Iran to address the concerns 
of the international community by abandoning its nuclear weapons 
program and by doing so completely and transparently.
    The UNSC could call upon all members of the United Nations to take 
measures in support of the Security Council decisions to bring Iran 
into compliance with the NPT and undo the dangers created by Iran's 
covert nuclear weapons program. Member states are already bound to take 
similar and related measures under U.N. Security Council Resolution 
1540.
    The U.N. Security Council could reiterate that the full range of 
options available to the U.N. Security Council may be warranted when a 
threat to international security arises.
    Iranian actions are reducing the time available for the 
international community to prevent the appearance of a nuclear-armed 
Iran. More measures undoubtedly will be required of the international 
community and the UNSC. To gain international support, however, the 
first step must be for the UNSC to make clear to all where it stands. 
This would help provide a foundation upon which the international 
community can build an effective, united response.
    Iran and North Korea have many differences in culture and context, 
the most obvious being the extreme nature of Pyongyang's isolation from 
world politics and economics, but both are serious threats to 
international security. Understanding the differences is important. One 
of the great challenges facing nonproliferation today is bridging the 
knowledge gaps between regionalists and functionalists, and I commend 
the committee for bringing both types of experts here today. For my 
part, let me concentrate on some of the lessons, I believe, should have 
been learned from the North Korean experience that are of relevance to 
Iran.
    We must recognize that IAEA findings of discrepancies, or failures 
to report on materials and activities, are not merely technical and 
historical. Nor are they to be dismissed or grandfathered. Complete 
disclosure and transparency is necessary to have any confidence that we 
are dealing successfully with the real nuclear weapons program.
    Although Iran's ability to produce necessary fissile material is 
the major missing piece for the Iranian nuclear weapons program, we 
must not ignore other activities that Iran has underway as part of 
their nuclear weapons program and also their programs to develop 
ballistic missiles and other means of delivery.
    In Korea, it was a covert reprocessing activity that created the 
crisis, but uranium enrichment was always a concern. Likewise, in Iran, 
we have become focused on near term enrichment capability, but we 
should not lose sight of the dangers associated with reprocessing in 
Iran.
    We must recognize that because of the dangerous behavior and 
rhetoric of Iran, as in the case of North Korea, business as usual will 
be insufficient. In the case of North Korea, in 1991, we developed the 
North-South Denuclearization Agreement that prohibited both 
reprocessing and enrichment, providing something of an NPT-plus regime 
because of the difficult security context.
    Undoubtedly, the process of negotiation and engagement will take 
time, but we must manage that time properly. For its part, Iran needs 
time to complete tasks related to its nuclear weapons program, and it 
will want to buy more time and create other windows through which it 
can work on its program. For example, Iran might readily forgo 
temporarily industrial scale activity for the period of time it needs 
to do more research to make that production capability effective. We 
need to understand the undesired consequences of partial measures that 
address some but not all of Iran's nuclear weapons efforts.
    Likewise, difficult negotiations will create pressures to 
exaggerate small accomplishments or dismiss steps backward. We must be 
careful not to get so caught up in the process that we lose sight of 
the goal. In this regard, the experience with Libya is clearly a more 
attractive model than that with North Korea.
    In dealing with North Korea, the lengthy negotiating process often 
left us in what might be called an NPT-minus situation with threats to 
withdraw from the NPT and on-again/off-again IAEA and other access and 
inspections. At the same time, the gradual erosion of the situation 
discouraged action because the threshold of additional danger at each 
moment was too small to motivate the international community to act 
even as the total danger grew. This was an experience with North Korea 
that we should try to avoid with Iran.
    We must also understand that we, and others, have more tools than 
the IAEA. Efforts like the Proliferation Security Initiative provide 
important means to help with nonproliferation.
    Everyone speaks of both carrots and sticks, but psychology and 
culture differ. Incentives and sanctions have been studied extensively. 
Sometimes they work. Sometimes they don't. This committee does not need 
for me to repeat the history or the literature. I would, however, like 
to highlight a few of the fundamentals that I think are most important 
in the case of Iran.
    The United States already has extensive sanctions against Iran, but 
this is the exception rather than the rule among countries. We should 
consider the consequences if other nations were to do what we do. When 
broad sanctions or incentives become necessary, those provided by a 
distant actor may be less effective than narrow sanctions nearly 
universally enforced or targeted sanctions by a party of importance. In 
the case of Iran, Europe is an important consideration, but Russia and 
China may determine the effectiveness of both carrots and sticks. Both 
have extensive economic and political interests in Iran that could 
influence Iran positively. Unfortunately those same interests create 
pressures to lower the priority given to nonproliferation.
    If measures are taken, the first and most important of them should 
be aimed at the resources, prosperity, and legitimacy of the regime's 
leadership and those who keep the oppressive leadership in power.
    In summary, we need to recognize that Iranian noncompliance with 
the NPT, however technical, is not about technicalities or the fine 
print; it is about nuclear weapons in the hands of a regime that could 
dramatically destabilize the world creating conditions that lead to 
economic depression, WMD terrorism, and war. If we fail to prevent a 
nuclear-armed Iran, we are not without measures to try to deter or 
defend our allies, our interests, and ourselves. Yet, we would all be 
better off if we avoid getting into those dire straits.

    The Chairman. Thank you very much, Mr. Lehman, for your 
testimony.
    I would like now to call upon Dr. Patrick Clawson, deputy 
director for Research of the Washington Institute for Near East 
Policy.
    Dr. Clawson.

STATEMENT OF DR. PATRICK CLAWSON, DEPUTY DIRECTOR FOR RESEARCH, 
 THE WASHINGTON INSTITUTE FOR NEAR EAST POLICY, WASHINGTON, DC

    Dr. Clawson. Thank you very much for letting me appear 
today and letting me put my statement into the record.
    Given the fiasco about Iraq's weapons of mass destruction, 
we face an uphill battle in persuading people that the threat 
from Iran is real, and in waging that battle we would be well 
advised to understate our case and not to rely upon what our 
intelligence agencies tell us is almost certainly happening, 
but to the maximum extent that we can to emphasize what it is 
that Iran itself acknowledges that it is doing.
    Here the new President of Iran, President Mahmoud 
Ahmadinejad, helps us a lot by his big mouth. His famous 
comment about Israel must be wiped off the map was made in an 
October conference, the title of which is often misreported. 
The actual title was ``The World Without Zionism and America.'' 
Those last two words are not idle phrases from President 
Ahmadinejad because he really sincerely believes that his 
cothinkers were able to bring down one superpower, namely the 
U.S.S.R., and that they will be able to do that again, to 
America. This is a man who regularly says that Islam is not 
limited to a city or country; ``if we intend to run the world 
we should prepare the way for it.'' He means that.
    But there are also a lot of Iranian actions that we can 
point to. Let me just cite two areas, namely terrorism and 
their nuclear program. On terrorism, there are many things they 
do, whether it is in Iraq or with al-Qaeda, that our 
intelligence community tells us are reasons for great concern. 
But I would urge us to concentrate on that which the Iranian 
leaders themselves openly acknowledge that they are doing, so 
that we do not have to deal with complaints or suspicions about 
how good is our intelligence.
    In particular, Iran openly acknowledges that it provides 
hundreds of millions of dollars in support for Hezbollah in 
Lebanon. Now, for a long time Hezbollah enjoyed a lot of good 
press, but as Lebanon has moved toward democracy and as 
Hezbollah has blocked those moves and has worked more openly 
with Syria to prevent Lebanon from achieving its full 
sovereignty, Hezbollah is finding itself in a more isolated 
position and, therefore, more vulnerable to pressure. I was 
struck by the fact that recently the United Nations complained 
about arms smuggling to Hezbollah, something that the U.S. 
Government for many years has complained about, but to find the 
United Nations complaining about it, that is a step forward.
    Similarly, Iran has, for a long time, openly acknowledged 
that it is the principal supporter of Palestinian Islamic 
Jihad. Palestinian Islamic Jihad is a group that really does 
not have a whole lot of support inside the West Bank and Gaza 
Strip and relies upon the Iranians. So we can say that its 
terrorist activities are very much the Iranian responsibility. 
That is a different situation than with Hamas, which Iran would 
dearly like to work with more closely, but has always 
maintained a certain independence from Iran.
    This same approach that I am suggesting about the terrorism 
issue I would also carry over toward the nuclear issue. As Mr. 
Lehman was explaining, there is excellent reason to think that 
Iran has a nuclear weapons program, but we do not need to get 
into that. We can just take Iran's statements at face value 
that all it is doing is building a full nuclear fuel cycle. 
There is no question about that. Iran shows to reporters what 
it is doing. Iran openly acknowledges this. This is openly 
known.
    Then we can point out that people like the Nobel-Peace-
Prize-winning Director of the International Atomic Energy 
Agency, Mohamed ElBaredei, says that there should be a global 
moratorium on these enrichment facilities because they are so 
dangerous that if they are completed they would put a country, 
``a few months away,'' from having a nuclear weapon. So we can 
simply say that, look, Iran, even if we will accept all your 
arguments that all you are doing is building a nuclear 
enrichment program, that is too dangerous. And, in particular, 
given your track record of lying to the IAEA for 18 years, we 
cannot accept that you have lived up to your half of the NPT 
bargain; that bargain being that states are allowed to have 
dangerous technologies in return for living up to their 
safeguards agreements and being open and honest about what they 
are doing. And since you have not been open and honest, Iran, 
well, sorry, but you cannot have this dangerous technology.
    This approach, rather than emphasizing the intelligence 
information which suggests that Iran actually has a nuclear 
weapons program, would, I suggest, be more convincing to people 
in the region, people in Iran, and people around the world.
    Similarly, when it comes to the question of the threats 
that Iran's nuclear program represents, as Senator Biden said, 
Iran obviously lives in a dangerous neighborhood and everyone 
knows that. We would do well to acknowledge that, while at the 
same time pointing out that, in fact, nuclear weapons have 
generally been a doomsday weapon, to be used in an ultimate 
scenario of great catastrophe, and it is very hard to see how 
Iran faces that kind of a security problem. Iran's security 
problems are failed states around it, the rampant drug 
smuggling that comes in from Afghanistan, the spillover of 
terrorism that they are suffering from Iraq. These are Iran's 
problems and nuclear weapons are not useful for dealing with 
Iran's security problems.
    Whereas, no matter what Iran's intentions are, if it 
acquires a nuclear capability it will inevitably be a greater 
player in Middle Eastern politics in a way that would upset 
many of its neighbors and, therefore, could well spark an arms 
race that would destabilize the entire region. It is disturbing 
to me that I have had Pakistani generals describe, in 
considerable detail and accuracy, the arrangements that Germany 
and the United States had during the cold war about the 
stationing on German soil of American nuclear warheads that 
were on top of missiles controlled by the Germans. We took the 
attitude that that was consistent with Germany's NPT 
obligations because we continued to control the warheads. If 
Pakistan were to store its warheads on Saudi soil on top of the 
Saudi long-range missiles under a similar arrangement that the 
United States and Germany had, I certainly would not feel more 
comfortable and I suspect that our Israeli friends would feel 
even less comfortable.
    So there are many ways in which we can describe the Iranian 
threat that understate the case and I think would be more 
convincing as a result. When it comes to American responses--
excuse me--the international community's responses as to what 
to do about Iran's programs, there as well I think it would be 
useful for us to understate the case. So I would put on the 
table some instruments of persuasion and not just instruments 
of dissuasion. In particular, during the cold war we found that 
confidence and stability-building measures were useful for both 
sides, and there are some confidence and stability-building 
measures which would be in the interest of the United States, 
but I think we could say to a candid world that these are also 
in Iran's interests. We might not persuade the Iranians to 
accept such things as an incidents-at-sea agreement to prevent 
episodes in the Persian Gulf or an exchange of military 
observers, but I do think this would help in the battle for 
hearts and minds if we, at least, made an offer of instruments 
of persuasion as well as dissuasion.
    When it comes to the instruments of dissuasion, there has 
been much talk about the Security Council process and that is 
very important, but there are things that we can do parallel to 
the Security Council process that do not depend upon our 
waiting for the Security Council to act, and those would be 
wise measures for us to initiate now. So, for instance, there 
are a number of deterrence and containment steps that we could 
take that could help reassure neighboring countries and also 
affect Iran's calculus.
    For instance, if we were to announce that we are prepared 
to sell to the Arab States, in the Persian Gulf, more advanced 
antimissile systems and air defense systems, that could raise 
doubts in the minds of the Iranian decisionmakers about their 
country's ability to reliably deliver its nuclear weapons and 
that could affect their calculations. It could also affect the 
calculations of regional states about whether or not they need 
to proliferate on their own.
    Furthermore, Iranian hotheads regularly threaten to close 
the Strait of Hormuz if the West escalates pressure on Iran on 
the nuclear program. I would just remind you that our Defense 
Intelligence Agency regularly informs Congress that Iran has 
the capability to temporarily close the Strait of Hormuz. Well, 
that would suggest to me that we would do well to exercise how 
would we protect that vital strait and to move additional 
assets into the region to protect the strait and indeed ask 
some of our NATO partners to also help in that task. A 
multilateral exercise showing that the outside world is 
prepared to deter Iranian escalation of a crisis would again be 
useful in showing the international resolve about these 
matters.
    But all these measures to press Iran and to deter it are 
stalling tactics, because so long as Iran has an Islamic 
republic it is going to pursue a nuclear weapons program. I 
happen to think that if Iranian reformers come to power they, 
too, would want nuclear weapons, but they would want good 
relations with the outside world even more. So I am confident 
that the Iranian reformers, if they came to power, would say: 
Well, if freezing the nuclear program is the price we have to 
pay for better relations with the outside world, then that is 
something we are prepared to do.
    So it is in our interest to promote that kind of reform 
movement inside Iran. There is not much we can do. There are 
modest steps we can take, and we have absolutely no idea how 
successful that is going to be or on what time scale. Analysts 
have not accurately predicted any revolution anywhere in the 
world in the last 200 years. I do not think that they are going 
to be successful this time, either. When President Reagan 
visited Berlin and said ``Mr. Gorbachev, tear down this wall,'' 
very few people thought that that wall would be gone within a 
few years. We have absolutely no idea about what time scale 
change will come to Iran and it would be unwise for us to 
assume that change will be successful.
    But it would also be both the morally right thing and the 
politically prudent thing for us to do to take the modest steps 
that we can to encourage that change.
    Thank you, Mr. Chairman.
    [The prepared statement of Dr. Clawson follows:]

    Prepared Statement of Dr. Patrick Clawson, Deputy Director for 
Research, the Washington Institute for Near East Policy, Washington, DC

    Given the fiasco about Iraq's weapons of mass destruction, it is 
only natural that many Americans are suspicious when the Bush 
administration warns that Iran is pursuing nuclear weapons. And against 
the background of many exaggerated claims about a direct Iraqi role in 
terrorism against the United States, it is to be expected that many 
Americans are skeptical about U.S. claims that Iran is the world's 
leading sponsor of terror. The U.S. Government has a tough task to 
convince Americans that Iran is a real threat. Undertaking that task is 
well worthwhile.

               HIGHLIGHTING WHAT IRAN ACKNOWLEDGES DOING

    One way to highlight the Iranian threat is to simply quote Iranian 
leaders. It is not hard to cite Iranian leaders' threatening rhetoric. 
The October 26, 2005, conference where President Ahmadinejad said, 
``Israel must be wiped off the map'' was actually entitled ``The World 
Without Zionism and America''--and those last two words are not empty 
rhetoric to a man convinced that his cothinkers have already brought 
down one superpower (the U.S.S.R.). Indeed, Ahmadinejad really means it 
when he says, ``Islam is not limited to a city or country and every 
Muslim should have a global insight. If we intend to run the world, we 
should pave the way for it.'' (Iranian Labor News Agency, in Persian, 
January 6, 2006). Those inclined to dismiss this language would do well 
to heed German Chancellor Angela Merkel's warning, ``When National 
Socialism [Nazism] was on the rise, there were many outside Germany who 
said, `It's only rhetoric, don't get excited.' There were times when 
people could have reacted differently, and in my view, Germany is 
obliged to do something at the early stages . . . We must prevent Iran 
from developing its nuclear program'' (quoted in the Washington Post, 
February 4, 2006).
    But let us go beyond words to look at actions. I will confine 
myself to two areas: Terrorism and the nuclear program.
    Terrorism. There are many troubling indications of Iranian 
involvement in terrorism, such as the continued acknowledged presence 
of senior al-Qaeda leaders in Iran who are supposedly under arrest but 
who were able to order the May 12, 2003, Riyadh bombings on their 
phones. However, if the U.S. Government emphasizes these links with al-
Qaeda, it risks running into international skepticism, because the 
information comes from intelligence sources. A much more fruitful 
approach is to highlight what Iran readily acknowledges.
    Top of the list here is Hezbollah in Lebanon. Richard Armitage, 
then Under Secretary of State, warned, ``Hezbollah may be the A-team of 
terrorists and maybe al-Qaeda is actually the B-team'' (speech at USIP, 
September 5, 2002). Iran was responsible for creating Hezbollah and has 
supported it for 20 years with hundreds of millions of dollars, 
shipments of advanced weapons, and training in sophisticated terror 
techniques. During the period when Israel occupied southern Lebanon, 
Hezbollah portrayed itself as a movement in resistance to foreign 
occupation. That was part of its activities, but it was also actively 
engaged in terrorist attacks on Israeli civilians and Jews, such as 
blowing up the Jewish community center in Buenos Aires. Hezbollah's 
self-portrayal as a resistance movement has worn thin since the 2,000 
Israeli withdrawal from Lebanon. In the first years after the Israeli 
withdrawal, many around the world were prepared to turn a blind eye to 
Hezbollah's armed activities. But that has changed as Lebanon has made 
great advances toward democratic independence, while Hezbollah 
continues to support Syrian interference in Lebanese affairs and uses 
its militia to threaten the stability of democratic institutions. Now, 
there is much scope for pressing the case against Hezbollah and its 
Iranian sponsors. Indeed, in recent weeks, even the United Nations 
complained about a January 31 arms shipment to Hezbollah by way of 
Syria, in blatant violation of U.N. Security Council Resolution 1559 
which calls for disarming militias though the United Nations was too 
polite to note that the arms came from Iran.
    Another Iranian-sponsored terror group that should be in the U.S. 
crosshairs is Palestinian Islamic Jihad (PIJ). Iran has worked hard to 
insinuate itself into Gaza and the West Bank. Fortunately, its puppet 
group PIJ has never taken off the way Hezbollah did--that is, PIJ has 
never sunk roots into the local communities. Precisely because PIJ is 
rather isolated, it is a good target for attack. The U.S. Government 
would do well to concentrate on criticizing Iran for its support of 
PIJ. That is much easier to do than to complain about Iran's 
longstanding courting of Hamas, which it has provided with money, 
weapons, and training. State Department counterterrorism coordinator, 
Henry Crumpton, warns, ``it is clearly an [Iranian] objective'' to make 
Hamas into ``another proxy'' like Hezbollah which is ``just an 
extension of the Iranian Government'' (interview with Jerusalem Post, 
February 22, 2006). However, to date, Hamas has remained rather 
independent of Iran.
    Also difficult to confront are Iran's activities in Iraq. While 
U.S. officials have intelligence about Iranian arms shipments reaching 
insurgents, Iran can plausibly blame smugglers across the rugged 
border. And most Iranian activities in Iraq fall in a grey zone--
troubling, yet part of the usual rules of the game by which governments 
compete for influence. Major aspects of this support entail broad 
financial backing for Iran's friends in Iraq and an extensive 
propaganda apparatus, including the slick Al Alam television network.
    Nuclear weapons. There is no doubt Iran is building a ``nuclear 
fuel cycle'' which will let it dig uranium ore out of the ground and 
then ``convert'' it into a gas and ``enrich'' the uranium, increasing 
the proportion of the most weapons-usable type. Iran proudly shows 
nuclear fuel cycle facilities to reporters and to international 
experts. Rather than emphasizing the justifiable suspicions about 
Iran's intentions, it may be more productive to take, at face value, 
Iran's claim that it is only building a fuel cycle. Right now, only a 
few countries have a nuclear fuel cycle program, and most of them have 
nuclear weapons. Nuclear fuel cycle programs are so dangerous that 
President Bush has proposed, ``The 40 nations of the Nuclear Suppliers 
Group should refuse to sell enrichment and reprocessing technologies to 
any state that does not already possess full-scale, functioning 
enrichment and reprocessing plants'' (speech at National Defense 
University, February 11, 2004). In a similar vein, International Atomic 
Energy Agency (IAEA) Director General and Nobel Peace Prize winner, 
Mohammed ElBaradei of Egypt, has proposed to ``put a 5-year hold on 
additional facilities for uranium enrichment and plutonium 
separation.'' Further, he states that ``there is no compelling reason 
to build more of these facilities'' anywhere in the world (op-ed in 
Financial Times, February 2, 2005).
    Iran's declared intentions--to build a nuclear fuel cycle--would 
give Iran the capability to make the ``fissile material,'' as 
specialists call it, which is at the heart of an atom bomb. Making the 
fissile material is the hard part of making a nuclear weapon. 
Assembling the actual bomb is not particularly hard for an industrial 
country like Iran; ElBaradei estimates that task would take Iran only 
``a few months'' (Newsweek, January 23, 2006). Iran has no particular 
reason to actually do the bomb work yet; first, it has to complete the 
nuclear fuel cycle and make the fissile material. So it is possible 
that Iran has not started to work on how to put together a bomb because 
there is no need to do so yet.
    To be sure, there are disturbing indications Iran is actively 
designing and researching how to build atom bombs and fit them on its 
missiles. The January 31, 2006, IAEA report warns about ``alleged 
undeclared studies, known as the Green Salt Project, concerning the 
conversion of uranium dioxide into UF-4 (``green salt''), as well as 
tests related to high explosives and the design of a missile reentry 
vehicle, all of which could have a military nuclear dimension and which 
appear to have administrative interconnections.'' U.S. intelligence 
possesses more information in the same vein. Indeed, French Foreign 
Minister, Philippe Douste-Blazy, has said, ``No civil nuclear program 
can explain Iran's nuclear program. So it is a clandestine military 
nuclear program'' (Financial Times, February 17, 2006). But that is in 
the realm of inferring Iran's intentions from limited evidence, much of 
it from intelligence sources. Having seen how poor intelligence can 
be--overestimating the Iraqi weapons programs, underestimating the 
Libyan and North Korean programs--we should not be surprised if the 
world is skeptical about claims that are based on necessarily 
incomplete intelligence; indeed, Iran's latest response to the IAEA has 
been to dismiss these intelligence allegations as forgeries (New York 
Times, February 28, 2006). Therefore, Washington would do well to 
concentrate on what is known, which is that Iran is actively and 
proudly building a nuclear fuel cycle capability which will enable it 
to quickly build nuclear weapons if it so decides.
    In addition, the U.S. Government should emphasize the IAEA Board of 
Governors' complaints about ``Iran's many failures and breaches of its 
obligations to comply with its NPT (Non-Proliferation Treaty) 
Safeguards Agreement'' (to quote the most recent resolution adopted on 
February 4, 2006). The IAEA reports lay out in detail how Iran has lied 
about its nuclear program for 18 years and how Iran continues to refuse 
to answer many of the IAEA's questions about its activities. The point 
to be driven home is that the NPT is a bargain: Countries have the 
right to peaceful nuclear technology if they live up to the obligation 
to be open and transparent about their nuclear activities. Iran claims 
the rights, but it has not fulfilled its obligations. Framing the case 
that way is the most effective way of refuting Iran's claim that its 
rights are being violated.

                  THE THREAT POSED BY IRANIAN ACTIONS

    Iran's activities pose many threats to U.S. interests. For 
instance, there is a serious risk that Iran could undermine the 
stabilization of Iraq. Michael Rubin has warned, ``Step-by-step, 
Iranian authorities are replicating in Iraq the strategy which allowed 
Hezbollah to take over southern Lebanon in the 1980s . . . As in 
southern Lebanon, what cannot be won through bribery is imposed through 
intimidation'' (Wall Street Journal, February 27, 2006).
    But let me concentrate on the threat from the Iranian nuclear 
program. Here again, the U.S. Government would do well to understate 
the case, given skepticism based on the Iraq experience. It is useful 
to begin by acknowledging that Iran lives in a dangerous neighborhood 
and that nuclear weapons are sometimes a logical response to security 
threats. That would put Washington in a better position to argue that 
nuclear weapons make no sense for Iran's legitimate security concerns. 
Nuclear weapons are appropriate as a doomsday weapon, and so they are a 
logical weapon for a small country facing larger neighbors who threaten 
to obliterate it--think Israel or Pakistan. But now that Saddam Hussein 
is gone from the scene, Iran is surrounded by weak and fragile states 
which have no interest in invading it. Iran's real security concerns 
are from state failure, such as drug smuggling from Afghanistan and 
ethnic separatist violence from Iraq and Pakistan. Iran's only problems 
with powerful states are because of the fights which Iran has chosen to 
pick with the United States and Israel--countries which would be happy 
to live in peace with Iran if it stopped its sponsorship of terrorism 
and opposition to the Middle East peace process. In short, the U.S. 
Government should emphasize that Iran has security problems, but that 
nuclear weapons are not the answer to those problems.
    Furthermore, regardless of Iran's motivations for establishing its 
nuclear program, nuclear advances would inevitably make Iran a bigger 
player on the regional scene. That is a matter of concern because Iran 
is not a status quo power. The theme of my recent history of Iran, 
``Eternal Iran: Continuity and Chaos'' (coauthored with Michael Rubin; 
Palgrave Press, 2005), is that Iranians are proud nationalists, 
intensely aware of their ancient glories; they remember that a mere 200 
years ago, Iran was twice its present size.
    To understand how Iran would use its nuclear program to throw its 
weight around, consider what Iran would be able to do regarding Israel. 
A nuclear-ready Iran might argue that it has the right to be consulted 
on what constitutes an acceptable settlement between Israel and its 
Arab neighbors, claiming that the entire Muslim world is affected by 
the future of the holy places in Jerusalem. That would be bad enough--
Iranian meddling would reinforce Palestinian radicals and complicate 
any effort to normalize relations between Israel and Middle Eastern 
countries. But a nuclear-ready Iran might take greater risks in its 
support of anti-Israel Palestinians, for instance, transferring to 
Hamas the same long-range rockets Iran has stationed in Lebanon (so 
far, those rockets remain under Iranian control, rather than being 
released for independent use by Hezbollah). And there is always the 
possibility--however faint it may be--that in a crisis, Iran might 
threaten the use of nuclear weapons, which it would undoubtedly present 
as a defensive measure designed to prevent Israeli aggression against 
helpless Arabs.
    Even if Iran did not directly threaten Israel, it is likely that a 
nuclear-ready Iran would set off a regional arms race, making the 
Middle East a more dangerous place with serious consequences for world 
peace. Iran's neighbors are not going to sit still if Iran starts 
throwing its weight around. The grave risk is that they will respond by 
activating their own nuclear programs. It would be very bad news if 
Egypt decided that it needed to have the same nuclear fuel cycle 
capability Iran is pursuing. And there are rumors that Pakistan and 
Saudi Arabia have a secret deal that if Iran becomes nuclear-ready, 
Pakistan will ship to Saudi Arabia some nuclear warheads to put on the 
long-range Chinese missiles Saudi Arabia bought some years ago 
(missiles the Chinese use to carry nuclear warheads). Ostensibly, the 
Pakistanis would retain control of the warheads, allowing Saudi Arabia 
to claim that it was not violating the NPT.

                             U.S. RESPONSES

    Let me confine my remarks to how to respond to the nuclear threat. 
Too much of the discussion about responses to Iran's nuclear program is 
concentrated on the extreme solutions: Either attack or appease. There 
is a wide range of intermediate policy options which hold much more 
promise.
    To influence Iran, the United States needs instruments of 
persuasion and dissuasion. Most of the persuasion instruments proposed 
by Europe have been economic agreements which smell like disguised 
bribes. Since Iran is flush with oil income that has swelled its 
foreign exchange reserves to over $30 billion, Tehran has dismissed 
these offers. A better approach is to concentrate on security measures, 
to counter the argument that Iran needs nuclear weapons because it has 
real security needs. There are many confidence- and security-building 
measures (CSBMs) and arms control measures which would provide gains 
for both Iran and the West. Examples of CSBMs would be an exchange of 
observers for military exercises in and near Iran, or an incidents-at-
sea (INCSEA) agreement to prevent unintended naval confrontations. The 
point of making such offers would be first and foremost to impress 
world opinion with how reasonable the United States is being. After 
all, if NATO and the Warsaw Pact could agree on CSBMs at the height of 
the cold war, then Iran would look stubborn and uncompromising if it 
refuses such measures when offered by Washington. Whether Iran accepts 
these offers is not the main point; we are primarily in a battle for 
hearts and minds--mostly the hearts and minds of Europeans, Russians, 
and Chinese (though, of course, the hearts and minds of Americans and 
Iranians as well). The more the great powers take a unified stance 
blaming Iran for causing a crisis, the more pressure Iran will feel to 
concede.
    As for instruments of dissuasion, there has been too much attention 
paid to comprehensive economic sanctions, which could damage Western 
economies if imposed while oil markets are so tight. Much more useful 
would be measures to emphasize Iran's isolation over the nuclear issue. 
In particular, Iran has suspended IAEA inspections which were 
authorized under the ``Additional Protocol,'' adopted by the IAEA in 
1997 drawing on the lessons of how Iraq and North Korea misled IAEA 
inspectors. (Iran, which has never ratified the Additional Protocol, 
agreed to follow its provisions as part of the November 2004 ``Paris 
Protocol'' with the British, French, and Germans). Furthermore, Iran 
has refused IAEA requests to interview key scientists in its nuclear 
program. It would be entirely appropriate for the Security Council to 
first call on Iran to cooperate with the IAEA and then, if Iran 
refused, to order Iran to cooperate, using the Security Council's 
authority under chapter VII of the U.N. Charter, which compels 
countries to follow Security Council orders. A chapter VII resolution 
would be a huge step, because if Iran fails to comply, then the 
Security Council would presumably consider enforcement action, such as 
sanctions or ultimately military force (any consideration of sanctions 
now would be highly premature: Iran has yet to refuse to comply with a 
Security Council order).
    If the Security Council issued an order to Iran, Tehran might well 
decide to comply. After all, when faced with a united United States-
European stance in October 2003, Iran did agree to suspend its 
enrichment activities--an action which very few Iran-watchers 
anticipated. Not only that, but after Iran backed out of the 
suspension, it again climbed down, agreeing in November 2004 to an even 
more comprehensive suspension. This track record, in which diplomatic 
pressure persuaded Iran to suspend the key part of its nuclear program, 
gives reason for optimism about the current diplomatic process.
    If, in fact, Iran refused to obey the Security Council orders, then 
the Council should sanction Iran. The aim of those sanctions should be 
to politically and diplomatically isolate Iran--which might not impress 
Ahmadinejad, but would worry many in Iran's ruling circles (bearing in 
mind that the Iranian President is not the key decisionmaker on foreign 
and security policy; that power rests with the revolutionary clerics, 
especially Supreme Leader Ali Khamenei). In several cases recently, the 
Security Council has imposed targeted sanctions, such as banning travel 
by key individuals, to drive home the high political price of 
unacceptable actions. In both Serbia and South Africa, the sanction 
felt most keenly by the public was the ban on international sporting 
competition. If young Iranians learn that their country's participation 
in the June 2006 Soccer World Cup is dependent on resolving the nuclear 
issue, there will be a dramatic increase in the interest they take in 
how the negotiations are going.
    At the same time that the Security Council process is unfolding, a 
parallel track would be to adopt defensive security measures. These 
measures could increase the likelihood that Iran will back down, 
because they would show Iran that its security will be worse off due to 
its hard-line stance on nuclear matters. Furthermore, deterrence and 
containment measures, similar to those of the cold war, would have the 
further advantage of putting the West in a better position to use 
military force if the need were to arise. One step in this direction 
would be to sell Arab States in the Persian Gulf more advanced 
antimissile systems and air defense systems. Raising doubts in the 
minds of Iranian decisionmakers about the country's ability to reliably 
deliver its nuclear weapons could make their use prohibitively risky 
for Tehran in all but the direst of circumstances. Another step would 
be to assist Israel to deploy more Arrow countermissile batteries and 
to develop more sophisticated follow-on versions of the Arrow.
    In addition, the West should act now to forestall Iranian threats 
to global energy supplies. Iranian hotheads regularly threaten to 
disrupt shipping in the Strait of Hormuz if the West escalates pressure 
on Iran about the nuclear question; to quote Iran's leading newspaper, 
``the arrogance (the United States) must receive the signal that a 
boycott of Iranian oil or in case of a bigger folly in connection with 
the military threat, it must give up the entire oil of the Persian 
Gulf'' (Touhid Ahmadi, ``Death Boomerang,'' Keyhan, February 22, 2006). 
A multilateral exercise to protect the Strait of Hormuz with 
minesweepers and other naval vessels, if conducted in the near future, 
would be a useful way to signal Iran that the West is serious and 
united in its willingness to use force to protect its vital interest in 
the gulf. At the same time, such an exercise would be entirely 
defensive and in no way suggesting that the West is preparing an attack 
on Iran.
    But all these measures to press Iran and to deter it are stalling 
tactics. So long as Iran has an Islamic Republic, it will have a 
nuclear weapons program, at least clandestinely. The key issue, 
therefore, is: How long will the present Iranian regime last? Analysts 
have had a poor record at predicting when fundamental changes will take 
place. Who among us expected that when President Reagan said in Berlin, 
``tear down this wall,'' it would indeed fall within 3 years? So, too, 
it is not possible to tell when change will come to Iran, though it is 
quite clear that the Iranian people detest the present system. At the 
same time that it concentrates on the nuclear issue, the United States 
has an important interest--both strategic and moral--in supporting 
Iran's prodemocratic forces. It would be a grave setback to 
Washington's reform agenda in the region if the United States were 
perceived to have abandoned Iran's beleaguered prodemocratic forces by 
making a deal with hard-line autocrats to secure U.S. geostrategic 
interests. On top of which, the reigning mullahs would almost certainly 
cheat on any such a deal, as they did during the Iran-contra affair 
when they released some hostages only to take others. The only sure 
route is the best moral route: Supporting Iranian democrats with what 
modest aid Washington can provide, such as increased television, radio, 
and Internet broadcasts.
    A word about the international diplomatic efforts. There is much 
good news here, especially the strong European-United States unity 
about Iran policy in contrast to the profound differences in the 1990s. 
Still there is a real risk that Iran is stalling for time. Despite 
limited successes of diplomats, Iran's program keeps moving forward, 
even if slowly. The pessimistic reading of Iranian actions over the 
last 3 years is that Iran has agreed to freezes in its nuclear 
activities whenever it has encountered technical problems which require 
more research to resolve; when Tehran is ready to make the next step 
forward, it unfreezes and moves ahead until it bumps up against the 
next technical constraint. This reading would suggest that diplomacy 
may be doing little more than providing legitimacy for Iran without 
effectively limiting its nuclear program. In other words, there is a 
serious risk in continuously compromising in order to preserve 
international unity: Unless we stand firm on certain basic points, 
diplomacy could become Iran's enabler.
    Some day, it may become necessary to take more direct action 
against the Iranian nuclear program. To quote IAEA director ElBaradei, 
``Diplomacy has to be backed up by pressure and, in extreme case, by 
force. We have rules. We have to do everything possible to uphold the 
rules through conviction. If not, then you impose them. Of course, this 
has to be the last resort, but sometimes you have to do it'' (Newsweek, 
January 23, 2006). If force were to be necessary, the options are much 
broader than an air raid like that which Israel mounted in 1981 against 
Iraq's Osiraq reactor. For instance, Israel put a stop to Egypt's 
missile program in the early 1960s by arranging the sudden premature 
death of German scientists working on those missiles in Egypt. Iran's 
nuclear program is a series of sophisticated, large industrial plants 
which could encounter industrial accidents.
    The bottom line is that Iran's nuclear program is an unacceptable 
risk to world peace; one way or another, it must be stopped.

    The Chairman. Thank you. Thank you very much, Dr. Clawson.
    We would like to hear now from Dr. Ray Takeyh.

 STATEMENT OF DR. RAY TAKEYH, SENIOR FELLOW FOR MIDDLE EASTERN 
     STUDIES, COUNCIL ON FOREIGN RELATIONS, WASHINGTON, DC

    Dr. Takeyh. Thank you, Mr. Chairman, for inviting me. I 
will confine my comments to the domestic political debates that 
surround Iran's nuclear issue as I understand them. I would 
actually suggest that really more than any other issue in the 
recent years, the nuclear question has exposed the divisions 
within the Islamic republic on the nature of its international 
orientation. I think as some of the other guests said here 
today, I think all factions are united on Iran having a robust 
nuclear program, which in due course will give it the option to 
assemble the bomb. However, the decision to actually cross the 
threshold and assemble a weapon in defiance of the 
international community and in violation of Iran's own treaty 
obligations has generated a subtle, yet, in my view, a robust 
debate.
    I would suggest that the primary supporters of a sort of a 
nuclear breakout option would be hard-line elements associated 
with the Supreme Leader's office, Ali Khamenei, a name who has 
not been mentioned yet today, curiously enough. Through command 
of key institutions such as the Revolutionary Guards and the 
Council of Guardians, they have inordinate impact on Iran's 
security issues and security planning.
    A very basic aspect of hard-liners' ideology is that Iran 
is in constant danger from a wide variety of predatory external 
forces and, therefore, requires military self-reliance. This is 
a perception that was molded by a revolution that sought to 
refashion the regional norms. That mission has failed, but the 
perception nevertheless remains.
    Obviously, as has been mentioned, Iran's nuclear 
calculations have been hardened by the rise of the new 
President, Mr. Ahmadinejad, and many other Iran-Iraq war 
veterans who are beginning to assume positions of power. 
Although the Iran-Iraq war ended some almost 20 years ago, I 
guess, for many within this generation it was their defining 
experience that conditioned their strategic assumptions. Even a 
cursory examination of Ahmadinejad's speeches reveals that for 
him the war is far from a faded memory; it is a real historical 
enterprise.
    This has led many, including the President, to perceive 
that, given the Western insensitivity to Saddam's war crimes 
and his use of chemical weapons against Iran, combatants and 
civilians alike, Iran's security cannot rest on disarmament 
treaties or global opinion. Given their paranoia and 
suspicions, the hard-liners insist that America does not 
necessarily object to Iran's proliferation, but it objects to 
the character of the regime, and that proliferation is the 
latest issue that the Americans are using to coerce and 
pressure Iran. This argument has some degree of validity at a 
time that the President is in India blessing its nuclear 
weapons program irrespective of its compliance with the NPT. So 
that plays into that particular rhetoric; that particular 
perception.
    Moreover, they suggest even if we give in on the nuclear 
issue, the Americans would then find another issue to coerce us 
with; therefore, why bother making any concessions at all on 
what is, after all, a critical national program. Beyond such 
demands, the international community's demands that Iran 
permanently and irrevocably relinquish what it perceives to be 
its rights under article 4 of the NPT, namely to have some sort 
of enrichment capability, has led the leadership to be 
nationalistically aroused. A country that has been historically 
subject to foreign intervention and capitulation treaties is 
inordinately sensitive to its national prerogatives and 
sovereign rights. For Iran's new rulers, they are not being 
challenged because of their provocations and their treaty 
violations, but because of superpower bullying and hypocrisy.
    In a peculiar manner, I think you begin to see their 
nuclear program and Iran's nationalism being fused in their 
imagination. Therefore, the notion of compromise and 
acquiescence has a limited utility to Iran's aggrieved hard-
line nationalists.
    The Islamic republic is nothing if not factionalized and 
there are other factions that play in the nuclear issue. The 
Western perception that somehow the nuclear issue is determined 
by a narrow band of conservatives is, in my view, flawed. 
Supreme Leader Khamenei has broadened the parameters of the 
debate and included elites from all the relevant political 
constituencies. The reformers out of power, the pragmatic 
conservatives struggling against their reactionary brethren, 
professionals from the national security establishment are all 
allowed to have a seat at the table and voice their views.
    Given the provocative nature of the nuclear program, 
Khamenei seems to be hoping that the burden of any ensuing 
international confrontations would be shared by all political 
factions alike, as opposed to being the sole responsibility of 
the conservatives only.
    Therefore, even the systematic consolidation of power by 
the conservatives since the February 2004 parliamentary 
election has not silenced voices calling for restraint within 
the decisionmaking process. Who are they? I think Patrick 
alluded to some of them. But in contrast to hard-liners, the 
pragmatic elements within the Islamic republic suggest that 
Iran's ongoing integration in the international community and 
the global economy mandates certain restrictions on its nuclear 
ambitions. It is tempting to see this issue as a divide between 
reformers and conservatives, but it enjoys support from such 
conservatives as Hashemi Rafsanjani, the head of the Expediency 
Council, and many other reformers who are very critical of the 
conservatives and are associated mainly with the Islamic 
Participation Front and other such reformist organizations and 
parties.
    Again, this particular faction does not call for 
dismantling of the nuclear edifice and the nuclear apparatus, 
but it merely calls for development of Iran's nuclear program 
within the confines of the NPT, which are rather broad. Given 
Iran's long-term commitment to NPT, the prevailing 
international scrutiny, a provocative policy could invite 
multilateral sanctions and lead Iran's commercial partners, the 
Europeans, the Japanese, and others, to embrace United States 
policy of pressuring and isolating Iran. Therefore, the nuclear 
issue has to be considered in the wider context of Iran's 
international relations.
    In recent months, as Iran's remarkably reckless diplomacy 
has led to a series of IAEA resolutions criticizing it and 
referring it to the Security Council, the members of this group 
have called for restraint, even suspension of various of Iran's 
nuclear activities. Rafsanjani has taken the lead in 
admonishing the new President to be cautious and many of the 
reformers have already come out and called for actual 
suspension of the program and resumption of dialog with the 
Europeans as a confidence-building measure.
    Hovering over this debate, as hovering over all debates in 
Iran, stands the Supreme Leader, Ali Khamenei. As mentioned, I 
think his instinct is to support the reaction elements within 
the state in their call for defiance and pursuit of the nuclear 
option. However, in his role as the guardian of the state he 
must consider the nuclear program in the context of Iran's 
commercial and international relations. Thus far, despite his 
ideological compunction, he has somewhat pressed the state 
toward restraint. The fact that Iran continues to negotiate 
with Russia and others, is open to negotiations, and has not 
resumed full-scale activities despite its capability of doing 
so reflects his willingness at this time to subordinate 
ideology to pragmatism. That may change as there are internal 
pressures pressing the leadership toward further defiance.
    The question then becomes what is to be done. I have 
proposed this idea in a number of forums. It has a poor 
reception in almost every one, so I will try it one more time, 
with the same degree of confidence that it will be unacceptable 
here.
    Today we are where we are. Iran's portfolio is at the 
Security Council. That is not reversible. But when the 
portfolio went to the Security Council in February, the 
administration suggested that we have a 1-month pause before 
the Security Council begins its deliberations, which will be 
some time, I suppose, in the middle of March. I would actually 
extend that pause for another 6 months, all the way to 
September, and in the meantime I would establish a contact 
group to essentially address Iran, in the same manner that the 
six-party talks are beginning to negotiate with the North 
Koreans.
    In the end, there is no Russian solution, there is no 
European solution to Iran's nuclear program. Despite our 
reservations and prohibitions, the United States has to be 
involved in these negotiations for the proliferation problem to 
be resolved conclusively. Therefore, this particular seven-
party format, which would involve the United States, the EU3, 
Russia, China, and Iran--that makes seven--would approach Iran 
with its own negotiating template, namely, in exchange for 
various security dialogs and even commercial and economic 
relationships, Iran would have to conclusively and irrevocably 
relinquish its enrichment rights, because I think, as other 
guests have said to you today, an enrichment capability means 
an essentially accelerated weapons capability should a state 
desire it.
    If Iran rejects this concerted last diplomatic effort, then 
the United States can return after a 6-month period to the 
Security Council with a greater consensus and greater 
assurances that the United Nations would impose tough 
multilateral sanctions against Iran. Examining the past history 
of countries that have renounced nuclear weapons or nuclear 
weapons programs, as this one is, the predominant theme is that 
these renunciations took place only after these countries 
experienced a substantial lessening of their external security 
environment and were greater partners in the global economy.
    And I will stop there. Thank you.
    [The prepared statement of Dr. Takeyh follows:]

   Prepared Statement of Dr. Ray Takeyh, Senior Fellow, Middle East 
         Studies, Council on Foreign Relations, Washington, DC

    After the International Atomic Energy Agency on February 4 voted to 
report Iran to the U.N. Security Council because of its concerns over 
its nuclear program, the rituals of diplomacy persist. The 
international community sees the Security Council move as ratcheting up 
the pressure in order to deter Iran from moving closer to a potential 
weapons capability. But the Islamic Republic is seemingly determined to 
acquire a sophisticated nuclear infrastructure that will avail it a 
weapons option at some point in the near future.
    Today, Iran stands at crossroads. For nearly 3 years, Iran was 
involved in delicate negotiations with Britain, France, and Germany, 
regarding the direction of its nuclear program. The failure of those 
talks have not lessened the scope of international diplomacy, as the 
Russians are now struggling to craft an agreement that prevents Iran 
from completing its fuel cycle capabilities. Ultimately, the course of 
Iran's nuclear policy may be decided less by what Europeans say, than 
by what Americans do. The nature of Iran's relations with the United 
States and the type of security architecture that emerges in the 
Persian Gulf are likely to determine Iran's decisions. It is neither 
inevitable nor absolute that Iran will become the next member of the 
nuclear club, as its internal debates are real and its course of 
actions is still unsettled. The international community and the United 
States will have an immeasurable impact on Iran's nuclear future. A 
more imaginative U.S. diplomacy can still prevent Iran from crossing 
the nuclear threshold and assembling a bomb.

             UNDERSTANDING THE NATURE OF THE IRANIAN REGIME

    More than any other issue, the nuclear question has exposed the 
divisions within the clerical establishment over Iran's international 
orientation. To be sure, Iran's many factions are united on the need to 
sustain a vibrant nuclear research program that, in due course, will 
offer Tehran the option of manufacturing a bomb. However, the prospect 
of actually assembling a weapon in defiance of the international 
community and in violation of Iran's longstanding treaty commitments 
has generated a subtle yet robust debate.
    From the outset it must be emphasized that for all the factions 
involved in this debate the core issue is how to safeguard Iran's 
national interests. The Islamic Republic is not an irrational rogue 
seeking such weaponry as an instrument of an aggressive, revolutionary 
foreign policy designed to project its power abroad. This is not an 
``Islamic bomb'' to be handed over to terrorist organizations or 
exploded in the streets of New York or Washington. For Iran this is a 
weapon of deterrence and the relevant question is whether its 
possession will serve its practical interests?
    The paradox of the post-September 11 Middle East is that, although 
Iran's security has improved through the removal of Saddam and of the 
Taliban in Afghanistan, its feelings of insecurity have intensified. 
The massive projection of American power in the region and the enduring 
antagonism between Washington and Tehran constitute Iran's foremost 
strategic dilemma and its primary motivation for the acquisition of the 
``strategic weapon.'' At a time when the American politicians routinely 
and loudly contemplate regime change in Iran, it is hard for the 
leadership in Tehran to categorically dispense with a nuclear program 
that can serve as its ultimate guarantor. However, as with nearly every 
other important issue currently being debated in the Islamic Republic, 
the notion of crossing the nuclear threshold is hardly a settled topic.
    The primary supporters of the nuclear breakout option are hard-line 
elements associated with the Supreme Religious Leader, Ali Khamenei. 
Through command of key institutions such as the Revolutionary Guards 
and the Guardian Council, Iran's reactionary clerics have enormous 
influence on national security planning. A fundamental tenet of the 
hard-liners' ideology is the notion that the Islamic Republic is in 
constant danger from predatory external forces, necessitating military 
self-reliance. This perception was initially molded by a revolution 
that sought not just to defy but refashion international norms. The 
passage of time and the failure of that mission have not, necessarily, 
diminished the hard-liners' suspicions of the international order and 
its primary guardian, the United States. Jumhuri-ye Islami, the 
conservative newspaper and the mouthpiece of Khamenei, sounded this 
theme by stressing, ``The core problem is the fact that our officials' 
outlook on the nuclear dossier of Iran is faulty and they are on the 
wrong track. It seems they have failed to appreciate that America is 
after our destruction and the nuclear issue is merely an excuse for 
them.''
    In a similar vein, Resalat, another influential conservative paper, 
sounded out the themes of deterrence and national interest by claiming, 
``In the present situation of international order whose main 
characteristics are injustice and the weakening of the rights of 
others, the Islamic Republic has no alternative but intelligent 
resistance while paying the least cost.'' Given such perceptions, the 
Iranian right does not necessarily object to international isolation 
and confrontation with the West. Indeed, for many within this camp, 
such a conflict would be an effective means of rekindling popular 
support for the revolution's fading elan.
    Iran's nuclear calculations have been further hardened by the rise 
of war veterans such as Mahmoud Ahmadinejad to positions of power. 
Although the Iran-Iraq war ended nearly 20 years ago, for many within 
the Islamic Republic it was a defining experience that altered their 
strategic assumptions. Even a cursory examination of Ahmadinejad's 
speeches reveals that for him the war is far from a faded memory. In 
his defiant speech at the U.N. General Assembly in September 2005, 
Iran's President pointedly admonished the assembled dignitaries for 
their failings: ``For 8 years, Saddam's regime imposed a massive war of 
aggression against my people. It employed the most heinous weapons of 
mass destruction including chemical weapons against Iranians and 
Iraqi's alike. Who, in fact, armed Saddam with those weapons? What was 
the reaction of those who claim to fight against WMDs regarding the use 
of chemical weapons then?
    The international indifference to Saddam's war crimes and Tehran's 
lack of an effective response, has led Iran's war veteran turned 
President to perceive that the security of his country cannot be 
predicated on global opinion and disarmament treaties.
    Given their paranoia and suspicions, the hard-liners insist that 
American objections to Iran's nuclear program do not stem from its 
concerns about proliferation, but its opposition to the character of 
their regime. They argue that should Iran acquiesce on the nuclear 
portfolio, the perfidious Americans would only search for another issue 
with which to coerce Iran. ``The West opposes the nature of the Islamic 
rule. If this issue [the nuclear standoff] is resolved, then they will 
bring up human rights. If we solve that, they will bring up animal 
rights,'' emphasized Ahmadinejad. As such, there appears no sufficient 
reason to compromise on a critical national program since such 
concessions will not measurably relieve American pressure.
    At the core, all disarmament agreements call upon a state to forgo 
a certain degree of sovereignty for enhanced security. Once a state 
renounces its weapons of mass destruction programs it can be assured of 
support from the international community should it be threatened by 
another state possessing such arms. This implied tradeoff has no value 
for Iran's hard-liners. Once more, the prolonged war with Iraq 
conditions their worldview and behavior. Iraq's use of chemical weapons 
against Iran with impunity, if not the tacit acceptance of Western 
powers, has reinforced Iran's suspicions of the international order. 
Jumhuri-ye Islami stipulated, ``As a rule, it is futile to enter any 
deal with the West over issues related to the country's independence 
and national security.'' For many of the Islamic Republic's reactionary 
clerics, the only way to safeguard Iran's interests is to develop an 
independent nuclear deterrent.
    Beyond such perceptions, the American demands that Iran relinquish 
its fuel cycle rights granted to it by the Nuclear Non-Proliferation 
Treaty has aroused the leadership's nationalistic impulses. As a 
country that has historically been the subject of foreign intervention 
and imposition of various capitulation treaties, Iran is inordinately 
sensitive of its national prerogatives and sovereign rights. For the 
new rulers of Iran, they are being challenged not because of their 
provocations and previous treaty violations, but because of superpower 
bullying. In a peculiar manner, the nuclear program and Iran's national 
identity have become fused in the imagination of the hard-liners. To 
stand against an impudent America is to validate one's revolutionary 
ardor and sense of nationalism. Thus, the notion of compromise and 
acquiescence has limited utility to Iran's aggrieved nationalists.
    Despite their bitterness and cynicism, the theocratic hard-liners 
are eternal optimists when it comes to the international community's 
reception of Iran's nuclear breakout. Many influential conservative 
voices insist that Iran would follow the model of India and Pakistan, 
namely the initial international outcry would soon be followed by 
acceptance of Iran's new status. Thus, Tehran would regain its 
commercial contracts and keep its nuclear weapons. The former Iranian 
Foreign Minister Akbar Velayati noted this theme when stressing, 
``Whenever we stand firm and defend our righteous stands resolutely, 
they are forced to retreat and have no alternatives.'' The notion of 
Iran's mischievous past and its tense relations with the United States 
militating against the acceptance of its nuclear status by the 
international community is rejected by the right.
    However, should their anticipations fail, and Iran become subject 
of sanctions, it is a price that the hard-liners are willing to pay for 
an important national prerogative. Ahmadinejad has pointedly noted that 
even sanctions were to be imposed, ``The Iranian nation would still 
have its rights.'' In a similar vein, Ayatollah Jannati, the head of 
the Guardian Council, has noted, ``We do not welcome sanctions, but if 
we are threatened by sanctions, we will not give in.'' The notion of 
the need to sacrifice and struggle on behalf of the revolution and 
resist imperious international demands is an essential tent of the 
hard-liners' ideological perspective.
    In the Islamic Republic's informal governing structure, the 
national security decisions are subject to input by many figures, even 
those not necessarily with a portfolio. The former Prime Minister, Mir 
Hussein Mussavi, for instance, who has been out of power for nearly two 
decades is, nevertheless consulted, intimately, about Iran's nuclear 
course. It appears that despite Western perceptions that the nuclear 
issue is decided by a narrow band of conservatives, Khamenei has 
broaden the parameters of the debate and has included relevant elites 
from across the political spectrum in the nuclear deliberations. Thus, 
reformers out of power, moderate conservatives struggling against their 
reactionary brethren as well as professionals from key bureaucracies 
are allowed to stress their point of view. Given the provocative nature 
of the nuclear program, Khamenei seems to be hoping that the burden of 
any ensuing international confrontation would be assumed by all 
political factions, as opposed to being the responsibility only of the 
conservatives. Thus, the systematic consolidation of power by the 
conservatives over the state does not necessarily mean that voices of 
restraint are excised from the decisionmaking process.
    In contrast to the hard-liners, the pragmatic elements within the 
Islamic Republic's officialdom insist that Iran's on-going integration 
into the international order and the global economy mandates accepting 
certain restrictions on its nuclear program. Although it is tempting to 
see this issue as divided between reactionaries and reformers, the 
coalition pressing for reticence features both conservatives, such as 
Rafsanjani, who is currently the head of the Expediency Council, and 
the reformist politicians attached to the Islamic Participation Front. 
The proponents of this strategy do not call for the dismantling of 
Iran's nuclear edifice, but for the development of a breakout capacity 
within the flexible guidelines of the NPT. Given Iran's long-term 
commitment to the NPT and the prevailing international scrutiny, a 
provocative policy could invite multilateral sanctions and lead Iran's 
valuable commercial partners, such as the European Union, to embrace 
the U.S. policy of isolating and pressuring Iran. Thus, for this 
constituency, a hedging strategy can sustain Iran's nuclear program 
while maintaining its international ties.
    In the recent months, as Iran's reckless diplomacy has generated a 
series of IAEA resolutions condemning its conduct and calling for its 
referral to the U.N. Security Council, the members of this group have 
called for restraint, even suspension of various nuclear activities. 
Rafsanjani has taken the lead in admonishing Iran's new President by 
stressing that ``we have reached a sensitive point. There is need for 
prudence on both sides. The reformers have gone further, as Mohsen 
Armin, a leading figure of the Organization of the Mujahedin of the 
Islamic Revolution, called on the government to ``suspend nuclear 
activities voluntarily and resume talks in order to build confidence 
and protect Iran's right to conduct peaceful nuclear activities in the 
future.'' For the more moderate elements of the nuclear program has to 
be seen in a wider context of Iran's international relations.
    Unlike their reactionary brethren, the more pragmatic elements 
appreciate that given Iran's ``exceptional'' nature and the eagerness 
of the United States to publicize all of its infractions as a means of 
multilateralizing its coercive policy, a defiant posture may not serve 
it well. The influential moderate politician Mohsen Mirdamadi 
stipulated, ``The reality is that our recent achievement in the area of 
nuclear technology has been part of our strength and created new 
opportunities for us in the international arena, but we should not turn 
this into a new threat. We should be careful not to bring the United 
States and Europe together.'' To be sure, other states have 
surreptitiously developed nuclear weapons, however, they did so with 
superpower acceptance--even complicity--and an international 
environment that was not suspicious of their intent. Iran does not 
enjoy such advantages, as its revolutionary past and its continued 
engagement with terrorist organizations makes many states wary of its 
motives. Tehran simply does not have the luxury allotted to Pakistan or 
India. All this does not imply a propensity to renounce a weapons 
capability but recognition of the need for restraint and the importance 
of the international community and its opinion.
    Iran's pragmatists are increasingly being drawn to the North Korean 
model, as Pyongyang has adroitly managed to employ its nuclear defiance 
to extract concessions from the international community. Through a 
similar posture of restraint and defiance, threats and blandishments, 
perhaps Tehran can also utilize its nuclear card to renegotiate a more 
rational relationship with its leading nemesis, the United States. The 
conservative publication Farda postulated such a move, stressing that 
``the credibility that these weapons have had and continue to have at 
the global level, their importance is in the support they give to 
bargaining in international negotiations and advancement of the 
country's national interests.'' The influential conservative politician 
Muhammad Javad Larijani, echoed this theme by stressing, ``If out 
national interests dictate, we can go to the bowels of hell to 
negotiate with the devil.''
    Hovering over this debate, once more, stands the Supreme Leader Ali 
Khamenei. As mentioned, Khamenei's instincts would be to support the 
reactionary elements in their call for defiance and pursuit of the 
nuclear option. However, in his role as the guardian of the state, he 
must consider the nuclear program in the context of Iran's larger 
international relations. Thus far, despite his ideological 
compunctions, Khamenei has pressed the state toward restraint. The fact 
that Iran continues to negotiate with the Russians and did suspend 
critical components of its program for over 2 years, reflects his 
willingness to subordinate ideology to pragmatism. Indeed, President 
Ahmadinejad's acceptance of the negotiations, despite his campaign 
rhetoric, denotes his willingness to accede to the direction set out by 
Khamenei.
    All this may change, as Iran does need to make critical decisions 
regarding its nuclear program. In assessing a state's nuclear path, it 
is important to note that its motivations cannot be exclusively 
examined within the context of its national interests and security 
considerations. Whatever strategic benefits such weapons offer a state, 
they are certainly a source of national prestige and parochial benefits 
to various bureaucracies and politicians. As such constituencies 
emerge, a state can potentially cross the nuclear threshold even if the 
initial strategic factors that provoked the program are no longer 
salient. The emergence of bureaucracies and nationalistic pressures in 
Iran is generating its own proliferation momentum, empowering those 
seeking a nuclear breakout. Time may not be on the side of the 
international community, as inevitably the pragmatic voices calling for 
hedging are likely to be marginalized and lose their influence within 
the regime.
    The question then becomes, What is to be done? The focus of U.S. 
diplomacy should not be on Ahmadinejad, as his pathologies are 
immutable. However, should Washington and its European allies craft a 
generous package of security assurances and measurable sanctions relief 
in exchange for Tehran's suspension of the critical components of its 
nuclear infrastructure, it may succeed in peeling away important 
clerical powerbrokers from the cause of nuclear arms.
    In the end, there is neither a Russian nor a purely European 
solution to Iran's nuclear conundrum. Despite its aversions and 
prohibitions, the United States has to be involved in negotiations with 
Iran for this issue to be conclusively resolved. At this point, 
Washington should contemplate establishing a contact group that would 
involve seven parties: United States, Russia, China, Britain, France, 
Germany, and Iran. The seven-party format would provide the Bush 
administration with enough political cover that it could state publicly 
that it has not bestowed legitimacy or recognition on the Islamic 
Republic. This would be similar to the stance Washington has taken vis-
a-vis Pyongyang in the six-party talks.
    These talks would offer Iran nuclear fuel guarantees that could 
place the fuel with a trusted third party. But fuel assurances alone 
would not be enough incentive to convince Tehran to suspend its 
uranium-enrichment program. In addition, the security dialog approach 
should provide Iran with tangible economic incentives designed to help 
its ailing economy. Furthermore, Iran's right to peaceful nuclear 
technologies would be recognized. However, in return, Tehran would 
agree to cease its enrichment activities as well as other work that 
could lead to production of weapons-usable fissile material. In 
addition, Iran would ratify and implement the additional protocol to 
help provide verifiable evidence that these activities have been 
suspended.
    If Iran rejects this concerted diplomatic effort, then the United 
States will have an easier time reaching a consensus through the United 
Nations to enact tough multilateral sanctions. Examining the past 
history of countries that have renounced nuclear weapons or potential 
weapons programs, the predominant theme is that these renunciations 
took place only after those countries experienced a substantial 
lessening of external threats.

    The Chairman. Well, thank you very much, Dr. Takeyh.
    We will have a round of questioning now by members of the 
committee with a 10-minute limit and then we will have a second 
round if that is required. I will commence the questions.
    Following through on your proposal, Dr. Takeyh, that we 
have a 6-month hiatus and talks which now incorporate in your 
formula Iran and China and Russia--and perhaps that is the 
right size group--I suppose you could explore whether there are 
other parties. But the Europeans certainly represent maybe not 
only themselves but also others who might be affected by 
economic relations with Iran. Certainly China and Russia are 
involved. Conceivably India might be a party if one were 
brainstorming, largely because of the potential for a 
multibillion dollar, multiyear deal that they have been 
fashioning with Iran.
    But the purpose of my exploring this with you is to say 
that I am wondering whether your group or anyone represented at 
the table or elsewhere has done any systematic research on the 
economic effects of an attempt to have a total embargo on Iran 
of its exports. Now, granted there might be questions about the 
enforceability of that, who really stops all the flow here, 
there, and yon, and I grant that. But, nevertheless, let us 
say, hypothetically, that the nuclear situation was serious 
enough that the world said after whatever stage, 3 months, 6 
months, a year, a year and a half, that we have to do something 
that is meaningful. But at the same time each of the countries, 
each of the parties involved that you have discussed around the 
table, will be making a calculation of what the effect might be 
upon their economies as well as on the economies of others who 
are customers or partners of their situations in trade.
    We would certainly be making such calculations, or at least 
the futures markets on oil and natural gas would be making 
calculations, as they do whenever rumors begin to float. I make 
this point because it appears to me that each of the countries 
involved and their publics need to have a certain amount of 
discussion during this period of time, as to the consequences 
of their economies and everybody else in the world.
    In addition, we need to have a more careful analysis of the 
economy of Iran. That may be harder to come by, but at the same 
time there are surely people who have thought about those 
issues and have, at least, plus or minus assumptions.
    I mention all of this because my fear is not that people 
are being glib about sanctions, but at the same time people 
also may be glib about the fact that this is just not going to 
happen, that as a matter of fact you go to the Security Council 
and nations begin to take a look at the deals they have already 
made or the potential for energy security or lack of it. So it 
becomes convenient, ultimately, to say this is a bridge too 
far.
    So, if we are going to have the 6-month pause that you 
suggest, and that may be a good idea, I would like for this not 
only to be maybe a parallel to the six-party talks with North 
Korea, which go on and off; at the moment off. We do not know 
when they will come on again. I would like some concerted study 
and debate in this country, as the report clearly would be.
    Let us say one estimate would be that the price of oil 
would go to $150 a barrel, at least temporarily, given 
disruptions and the close call now of how much reserve there is 
in the world, and we begin to calculate that as itinerant 
politicians are going back and forth to our States and visiting 
with people. They see gasoline at the tank at $5 a gallon or 
whatever it might be at that point and they say: Why do you not 
do something about this? Why are you sitting there debating? 
Well, we are doing; we are discussing, and, as a matter of 
fact, maybe we have already enacted sanctions against Iran. The 
oil is not there any more, and as a result these are the 
consequences.
    It may be that as the American people understand the 
dilemma that nuclear weapons in the hands of Iran means to us, 
whether it be our troops in Iraq, any prospects we ever have in 
the Middle East, helping anybody for that matter, whether we 
even have a presence in the Middle East after all of that--
these are issues that surround this that I do not think are 
getting much of an airing. That is one reason for having this 
hearing. We will have some more to begin to discuss what we are 
really talking about, what the consequences to us and others 
are, quite apart from the Iranians.
    My question to you, first of all, is where, if this 
committee were interested in having this kind of discussion, 
just among those of us around this table, would we find data, 
information, estimates that could lead to an informed debate, 
as opposed to exaggerations, fear-mongering, all the rest of 
it? Do you have any suggestions where we might look?
    Dr. Takeyh. Yes. A lot of this stuff is actually--Iran's 
budget and so on--is actually printed and on various Web sites. 
It is an opaque society, but there is some degree of 
transparency.
    Iran's economy is vulnerable to rigorous multilateral 
sanctions, particularly involving its petroleum-gas sector, not 
just in terms of other countries not purchasing Iranian oil, 
but also in terms of investments in Iran's dilapidated oil 
industry. I think Iranians estimate they require about $70 
billion investment in their oil and gas industry over the next 
10 years in order for them to continue their current level.
    The Chairman. So, the withholding of that is significant 
all by itself.
    Dr. Takeyh. Yes, in order to continue their level of 
production and perhaps even increase it.
    In terms of actually sanctions working on issues other than 
oil and gas, which I think would be very difficult sanctions 
for the international community to accept because of the 
dramatic impact on the global economy, it is important to 
recognize that a lot of foreign investors stopped actually 
going into Iran in June 2005 when President Ahmadinejad was 
elected. Once he was elected, if you are a German 
pharmaceutical company or a Chinese company you are not looking 
at a President, who is disdainful and suspicious of foreign 
investment and says he does not want it, as necessarily a 
hospitable place to do business.
    If you are an oil company, you have to deal with the 
situation because Iran is an important producer and has a very 
rich repository. But much of the foreign investment has already 
shrank, and a lot of the internal investment is already leaving 
the country.
    Now, Iran is actually, I would say, in the long term, is in 
economically bad shape, in the short term is in economically 
good shape. That is the paradox of it. It has a substantial oil 
stabilization fund, which the President of the country is 
trying to raid and it is being resisted by the Parliament. It 
has actually--its projected economic growth for next year I 
think they figure will be 7 percent. But long term, of course, 
Iran has demographic problems. It has problems with its oil 
industry. It has problems managing its situation. So in the 
immediate level I do not think Iran is increasingly vulnerable.
    Second of all, the last thing I would say is, I do not 
actually believe that the international community would accept 
an oil embargo on Iran, and when administration officials sit 
in places like this and you ask them, what sort of sanctions 
are you contemplating, they say: Oh, we have a menu of options. 
So far the United States has been able to get Iran's portfolio 
transferred from one international organization to another. It 
is because we have not asked the international community--the 
Japanese, the French, the Germans, and the Indians--to actually 
put their economic, commercial interests at stake. We have 
asked them for procedural acquiescence: Could you vote for us 
on this issue with the assurance that we are not going to ask 
for a whole lot?
    Now we are getting into a crossroads. Now we are going to 
the Security Council and we eventually are going to ask our 
partners, the coalition, that they will have to accept our 
sanction policy and put their commercial contracts and treaties 
at stake. It is entirely possible that international unity may 
evaporate at that stage. I am not certain, but I would not bet 
on it.
    Now, Patrick is an economist and he is dying to answer this 
question, with years of training as an economist----
    The Chairman. Well, let me just, before he does, say that I 
think that you are on track. We are now, we are at a point in 
which we are going to the Security Council March 6. You are 
suggesting a little bit of a time-out period for a larger 
negotiation, because when we press the Chinese or the Russians 
or anybody else they might say with regard to their economic 
situation: No, this is a bridge too far; procedure is one 
thing, actual economic pain is another.
    This is why I want to try to quantify, what are the 
actualities of this kind of thing? What kind of situation would 
we have in the world if we were to do this? Because you are 
quite correct, our administration and everybody else, the 
administration I suppose of Germany or Britain, would say that 
all options are on the table and that includes all kinds of 
sanctions, military activity and what have you. But as a matter 
of fact, what are the consequences of any of these things, 
short of military activity, just the often mentioned embargoes 
and sanctions?
    I think we want to get some facts out here so that we are 
not glib in talking about options on the table, off the table. 
Your point is that thus far we have got some procedural 
acquiescence.
    Dr. Takeyh. Which is not inconsiderable.
    The Chairman. Yes, and maybe that is helpful.
    Patrick, would you come in at this point.
    Dr. Clawson. Mr. Chairman, the last time that the Iranians 
thought that the world was acting to stop their flow of oil was 
back during the Iran-Iraq war in 1988, and the Iranian response 
was to sprinkle mines throughout the Strait of Hormuz and to 
threaten shipping. They have regularly practiced the capability 
to do that again and their hotheads regularly announce that if 
we were to impose an embargo that that is what we should 
anticipate happening.
    If Iran were, in fact, to try to impede shipping through 
the Strait of Hormuz, as I mentioned, the DIA Director says 
that they could do it for a period of time. That would have a 
very considerable impact on world oil markets. Even though the 
Director of the International Energy Agency, Claude Mandel, 
says that our world strategic stockpiles are good enough that 
we could go through a period like that and be able to stabilize 
markets, I think he is being very optimistic.
    So the key question is whether or not Iran would take 
aggressive actions against the shipping of other countries in 
the event of such an embargo.
    The Chairman. Well beyond its own predicament.
    Dr. Clawson. Exactly. And that is where the question of 
whether or not we have in place assets that can protect the 
strait, not just whether we can move them there in the next 
couple months, but are they there already, will become a 
crucial question. The answer, frankly, is that there are not 
the assets in place to get the Strait of Hormuz open and 
protect shipping. Yes, we could move those assets there. But 
boy, during the couple of months that that would take it would 
be a very interesting time to be in the oil business.
    The Chairman. Well, it would. The reason I ask these 
questions is not to be provocative. We are coming up to some 
difficult decisions. The American public needs to understand 
the consequences of all of this. We need to understand them. We 
have to make choices and votes. The information you have given 
is very important about the Strait of Hormuz. Iran has 
possibilities to disrupt other trade.
    We will leave to everybody's judgment as to what kind of 
surplus oil there is in the world, but every briefing we have 
had has suggested that is zero. You are right up against it. 
This is the reason that even an attack on the Saudis last week 
sent a spike for a day or 2 with regard to oil futures markets, 
with just the supposition that such a thing could happen at one 
very, very large refinery in Saudi Arabia.
    Senator Biden.
    Senator Biden. I wish you would keep going, Mr. Chairman, 
because, look, this is--one of the frustrating things about 
this discussion is that we have an awful lot of very bright 
people with very few answers to anything. Not just you at the 
table, but across the board.
    Everybody starts off with the proposition that we cannot 
tolerate a nuclear Iran. Wonderful. That is a great 
proposition. I agree with that. We cannot tolerate it. Then 
everybody says: OK, well, what are we going to do about it? And 
it ranges from, well, we are going to do what I think the 
administration is correctly doing; we are going to make sure, 
at a minimum, we are not the bad guy if anything has to happen 
because we have cooperated fully with the Europeans, with the 
Russians, with the Chinese, with the United Nations, with every 
agency available, to demonstrate that we are not a bunch of 
cowboys out there just as gunslingers. I think that is 
important. It is not an unimportant thing.
    Then you say, OK, but you know this administration that 
exists in Iran today, I do not think a single one of you 
believe there is any possibility it is going to cease and 
desist from seeking a nuclear capability in the near term 
absent some significant hurdle that it faces, and being 
sanctioned by telling them they are going to have their assets 
seized, which they have already moved, we are not going to let 
them travel, does anybody think that is going to alter their 
behavior in terms of this march forward that we are talking 
about?
    So, then we get down to, OK, there are two options that may 
affect behavior. One is a sanction regime, the other is a 
military option. Then we pursue the military option and we find 
out that the military option would require a significant--I 
understand General Clark is making a speech today and is 
putting on, which he has every right to do, his former hat as 
the Supreme Allied Commander and giving his assessment of what 
would be required--
x number of sorties, x number of divisions, blocking the 
strait, et cetera.
    Then we talk about sanctions. The only ones that would 
reasonably have any impact, most people think, are if you dealt 
with oil and gas, because the analysis that many people have 
done, I suspect you have done as well, is that if we could 
unite the world in doing that and we could take the hit, the 
hit on Iran would be consequential, maybe more significant on 
the world but very significant on them. But there has never 
been any measure of that.
    But everybody says, well, we are not going to be able to 
get the world to do that, but we are going to stand by the 
policy we will not tolerate a nuclear Iran.
    So let me say that one of the things we said all prior to--
and I remember, Ron, we talked about this, and your great help 
with the committee in trying to set up post-reconstruction 
capabilities within countries, et cetera. We talked at length 
about--you have all been in many discussions about what we 
talked about before we moved on Iraq. This is just pure Biden. 
No foreign policy can be sustained in this country without the 
informed consent of the American public. Flat-out, cannot be 
sustained.
    There is no information available to the American public on 
what the heck we mean by we cannot tolerate and what the 
consequences of either a military option would be for Americans 
or the consequences of what an embargo of consequence would 
mean for the Americans.
    So, I hope if we do nothing more in this committee, rather 
than judging whether or not the world community would go along 
with an embargo, or judging whether or not the world community 
would accept military action on the part of the United States, 
what would it entail for the United States of America? It may 
very well be if we really mean what we say, that we will not 
tolerate a nuclear Iran, that the American public might very 
well choose the economic hardship over the military 
confrontation. They should get a choice in this. They should 
get a say in this. They should have some input in this through 
their elected representatives.
    Obviously, I never speak for the chairman, but I suspect 
that is one of the reasons why he keeps pursuing this, if the 
options were employed, notwithstanding no one thinks the 
options can be employed. And the irony is, you may find we have 
more hydrogen-run automobiles in a heartbeat than in Tom 
Friedman's gas tax. I am not being facetious.
    My mother, God love her, she is 89 years old--88 years old, 
almost 89--lives with me, and she has said from the time I was 
a kid: Joey, out of everything bad something good will come if 
you look hard enough. All kidding aside, gas goes to $5 a 
gallon, awful, awful, incredible dislocation. In relative 
terms, relative to the rest of the world we are relatively no 
worse off than anybody else in the world. And guess what, we 
might have a real energy policy, not a joke, not a joke.
    Now, I am not proposing that. So what I would like you to 
do--and I am not going to say any more. I would like each of 
you to speak to--get real with us, will you? Do not be 
academics with us. Tell us what would the consequence be? Dr. 
Clawson, you are an economist. What are the consequences? What 
do you think would happen if we could convince the world to 
have an oil and gas embargo?
    Granted, I would not bet my daughter's graduate school 
tuition on it, but what would happen? What does it mean? And if 
any of you would also respond to the military option. We are 
told in various fora--and I am not revealing anything from any 
classified briefing we have had--this is not taking out Iraq's 
nuclear effort like the Israelis did. But you know, I could 
picture if this were, quote, an ``all-out war'' where we could 
bring Iran to its knees militarily at least. We could, in fact, 
have an embargo so no ship ever breached their ports. We could 
do a lot of damage to their various nuclear facilities without 
taking them all out. We could make it very difficult over the 
next 3, 4, 5 years for them to get to that point.
    So I guess what I am saying is, I worry about the rhetoric 
that ``we cannot, under any circumstance, tolerate a nuclear 
Iran,'' without knowing what the price we may have to pay if 
that is, in fact, the goal to accomplish that end.
    So can you, doctor, speak with me a little bit about the 
economic consequences to Iran as well as us, and can the rest 
of you talk in the few minutes that I have left about the 
prospects and the consequences of the use of military power to 
deal with this?
    Thank you.
    Dr. Clawson. I have done a fair amount of work for DOE on 
supply disruptions and if we are able to protect the Strait of 
Hormuz, if we judiciously use our strategic petroleum reserve, 
if we do not encounter problems from Venezuela, Nigeria, or 
Russia, then we would be able to keep the price $80 a barrel, 
something like that, and it would be touch and go for a few 
years, but we could--if all of those conditions are met, we 
could be staying at $80 a barrel.
    But we would be extraordinarily vulnerable to additional 
oil supply shocks under those circumstances, be it al-Qaeda 
attacks, things in Saudi Arabia, the like. And it would take 
several years before Iran would really feel the pinch because, 
as Ray mentioned, they have got this very large reserve fund at 
the moment, over $30 billion in foreign exchange reserves. So 
it would take several years before Iran would feel the pinch, 
but they would then indeed feel a very profound shock and that 
would be a big problem for them.
    On the military side, not my specialty, but let me just 
suggest that the potential for covert action, and that if we 
look around the Middle East, the way in which the Israelis 
stopped the Egyptian missile program in the early 1960s and the 
initial Israeli efforts against the Iraqi programs were to 
arrange premature deaths of scientists involved and to take 
other covert actions.
    The Iranian industrial facilities are highly complex 
industrial facilities that have been subject already to lots of 
industrial accidents. If the rate of accidents rose 
dramatically and that slowed down the Iranian program, that 
could have quite an impact.
    So, I would hope that if we ever got to that point of 
military action the first thing we would try would be things 
less confrontational like covert actions, because I worry that 
if we start attacking them they are going to attack us back. 
When the United States Navy thought that it caught the Iranians 
red-handed sprinkling mines in the Persian Gulf in 1988 and so 
we decided to take action against them, we forgot that they 
could take action against us and suddenly we were in the 
largest surface naval confrontation since the Korean war. The 
Navy had not even calculated that the Iranians might react. So 
the big risk that I would say about any air raids against Iran 
is the Iranians are going to fight back.
    Dr. Takeyh. I will just deal with the military option as 
such. I would actually suggest again that we do not have a 
military option in terms of disabling or I would even say 
slowing down the program. You always hear defenders of the 
military option or those who articulate it say, well, it will 
not destroy the program, but it will slow it down. I am 
actually prepared to contest that.
    If Iranians are engaged in redundancy, which every 
determined proliferator does, what does that mean? That means 
10 plants doing the same thing. You destroy nine of them, you 
do not necessarily shorten the nuclear timeline. In order for a 
military strike to work, the United States would require not 
good intelligence, but perfect intelligence. Now, I was not at 
Mr. Negroponte's briefing, but I do not think I have to be to 
know we do not have that sort of intelligence.
    Second of all, Iranian nuclear facilities are dispersed, 
they are hardened, they are urbanized. We have to prepare to 
take civilian casualties.
    Third of all, some people suggest, well, maybe redundancy 
is very cost wasteful; maybe the Iranians have not done it. If 
you are sitting in Teheran and every day the President of the 
United States says the military option is not off the table, I 
think you are engaging in redundancy.
    So we do not really have a military option. Now, whacking 
the scientists, Patrick can speak about that. I think the 
Iranians have enough scientific knowledge and scientific 
software to be able to continue the program.
    In terms of Iran's nuclear calculations, I do not believe 
they are immutable. I am unprepared to suggest that it is 
inevitable that Iran will become the next member of the nuclear 
club. I think we are in a very difficult situation and 
whichever path you go down to you have to go big. If you are 
going to go down the path of coercion you have to be prepared 
to have multilateral sanctions enacted by the United Nations, 
adhered to by the international community over a prolonged of 
time. If you are going to go down the road of concessions, you 
have to be prepared to offer American economic, political, 
security concessions to an unsavory regime.
    The hour is too late for IAEA resolutions and the hour is 
too late for pistachios and carpets. It has to be big, 
whichever direction you go to. But I think both those 
directions can have an impact on Iran's nuclear determinations.
    Senator Biden [presiding]: Thank you very much.
    Mr. Lehman. I agree that it is not too late, but it is 
going to be quite a challenge. You focused on the question of 
the price and I think the price will be determined by how we 
play the game. I agree it is going to take a substantial price 
even up front.
    There are sort of two ways to think about this. One is that 
it is a sort of pay me now or pay me later. I do think we need 
to understand the consequences of postponing action. The price 
later may be very, very high and we will wonder why we did not 
do something earlier.
    But there is another key factor the other witnesses Ray and 
Pat have mentioned. That is to a large degree the price is 
going to be determined by how much others are with us. Now, the 
good news right now is that much of the international community 
is with us, and, in fact, even on these somewhat arcane issues 
such as the R and D on enrichment they get it. They understand 
now that there is a real issue here.
    So you have asked about, the chairman asked about, the 
economic calculations. I have seen a lot of data. I have not 
seen a good comprehensive study. I would caution that, of 
course, it is going to be scenario-based because the various 
options play in a dynamic political world. So who is with us, 
how firm are they, how serious are they, will determine what 
kind of sanctions you can get, what impact it will have.
    Now, all the sanctions history is sort of a subset of the 
old question of who has got more leverage, the debtor or the 
creditor. I would translate that into the carrot and stick 
issue. So, for example, with Russia and its nuclear activities 
or China and its oil, on the one hand that puts them somewhat 
beholden to Iran. On the other hand, it gives them leverage on 
Iran, and if they are really sincerely going to be with us--and 
I have to note that, despite all of the efforts to work with 
the Iranians this week, the Russians have still, at least 
judging from the press reports, have hung firm on the matter of 
principle.
    So, I think that I would not--I think you are absolutely 
right, Senator Biden. If we walk in to the world and say, here 
is what we have decided, we have decided cut off all the oil 
now, there is going to be sticker shock up front. On the other 
hand, if you build the case and try the options and play the 
game well, I do not rule out that people will do the 
calculation and if that becomes necessary people may well step 
up to it.
    Senator Biden. Thank you, Mr. Chairman.
    Dr. Clawson, not now, but for the record, is it possible to 
get a copy of the analysis you made about oil? Or is that 
classified?
    Dr. Clawson. Let me find out, sir.
    Senator Biden. Or maybe you can just come and talk to me.
    Dr. Clawson. I would be happy to come and talk to you.
    Senator Biden. Thank you.
    The Chairman [presiding]: Thank you very much, Senator 
Biden.
    Senator Nelson.
    Senator Bill Nelson. Let Senator Obama go ahead.
    The Chairman. All right, you yield to Senator Obama.
    Senator Obama.
    Senator Obama. That is very kind of you, Senator Nelson. 
Thank you very much.
    Thank you, Mr. Chairman. Thank you, members of the panel. 
It is obviously a very important issue.
    Let me return, let me take the other side of what I thought 
was a terrific point made by Senator Biden. We have generally, 
across the board, said that a nuclear Iran is unacceptable. I 
happen to share that view. But let me play devil's advocate 
here, as I think it is worth at least exploring the other side 
or examining why it is not acceptable.
    There was an article by Barry Posen, last week, arguing 
that you essentially can maintain a containment posture to a 
nuclear Iran that might not be optimal, but might be preferable 
to the scenarios in which we have a significant oil embargo or 
we are engaging in military action. What is clear in this 
situation is there are no good choices. There are just better 
or worse choices.
    I was wondering if you could specifically, any of you, all 
of you, one of you, specifically address that argument that, in 
fact, when you weigh the costs and benefits, discouraging Iran, 
that that is a manageable process?
    Dr. Takeyh. I actually think a nuclear Iran is really an 
international calamity. Barry Posen actually calls himself a 
realist and makes that argument. That would contest the realist 
credentials.
    Should Iran become the second state that developed a 
nuclear weapons capability while being a member nation of the 
NPT, that would effectively eliminate the Nuclear 
Nonproliferation Treaty as a means of regulating global 
proliferation norms. The NPT is a problem in the sense that it 
is a treaty that requires modernization, it is a treaty that 
requires to be brought up to date. But it has served a very 
valuable purpose in maintaining some sort of a nuclear 
nonproliferation regime and it has limited the number of states 
that have actually crossed the threshold. That would end the 
NPT. It would no longer be a treaty of any degree of 
credibility and that will have a dramatic impact, I suspect, 
for international security.
    Second of all, an Iran with a nuclear weapons capability or 
even nuclear weapons, it is not unreasonable to believe that it 
will be a more aggressive state regionally because it will 
perceive certain immunities from having such a deterrence, and, 
therefore, it might be more of a revisionist state, it might be 
more of an aggressive state, within a volatile region, within a 
volatile subaspect of the region, the Persian Gulf, which I 
think is also disastrous.
    There are so many unpredictable consequences about the 
potential regional arms race. A region that should dedicate its 
resources to its economic betterment, given its demographic 
problems, will divert further resources to military hardware 
and that does not do the region as a whole any degree of 
benefit.
    So, I think this is an eventuality, this is a proposition 
that we should try to avoid at all costs.
    Dr. Clawson. I would just suggest, sir, that in my short 
lifetime the Middle East has been racked by so many horrific 
wars, and it would be such an act of optimism to think that if, 
in fact, the Middle East had a number of nuclear-armed states 
that nuclear arms would not be used. And the cost of that would 
be extraordinary for the world and extraordinary for the United 
States.
    I would just get very, very nervous about a Middle East in 
which there were a fair number of countries that were nuclear 
ready. Unpredictable changes in government, dictators doing 
bizarre things; this region excels in fanatics of all sorts. 
Mr. Posen's proposal is to gamble where the losses would be 
counted in the hundreds of thousands or millions of lives.
    Mr. Lehman. To say that it is unacceptable for Iran to have 
nuclear weapons correctly invites the question: So what do you 
do about it? I think we just need to recognize, as Pat and Ray 
have said very eloquently, this will be very, very bad. So the 
result for us is not to go slice our wrists. The result is we 
are going to have to do something about it.
    I just came back from the gulf and I just want to echo what 
Ray and Pat have said. The dynamics are so complex there. You 
are going to have some of the states in those regions that are 
coming to us and basically asking us to make commitments that 
this body may not wish to make. At the same time, if you are 
not prepared to make those commitments they are going to go in 
a different direction, in some cases acquiring their own daddy 
rabbits, their own protectors, or their own weapons, or make 
their own accommodations.
    This is an incredibly volatile region. So yes, we should 
not just make declarations of moral outrage. We have got to 
recognize we have got to roll up our sleeves.
    Senator Obama. I think the point you made, the last point, 
was borne out when I was visiting the region as well. The 
situation in Iraq obviously heightens the concerns of some of 
the other states about Iran's growing influence. It is hard for 
me to imagine that they would not respond in ways that would be 
very destabilizing for the region over the long term. I just 
wanted to get that on the record. It is part of what I think 
Senator Biden indicated. It is necessary for us, I think, not 
to just state these things, but to lay out precisely what the 
concerns are here.
    Dr. Takeyh--did I pronounce that properly? Given your 
comments about the NPT, I am just curious. The President is 
visiting India. What signal do you think we are sending to the 
Iranians about whether or not they can get away with something? 
I think that there is a general perception, you know, North 
Korea played this game, have not been--have not suffered dire 
consequences. Now we are looking at a potential deal with 
India, and which they developed nuclear weapons. Pakistan 
developed nuclear weapons and now the Bush administration 
considers them the strongest of allies.
    There is this sense that there is a short-term memory here 
and I am just wondering whether, specifically, since there is 
some indication that the administration may be trying to close 
this deal so that when he appears with Prime Minister Singh 
that there is some statement about it. Do you want to give me 
some sort of----
    Dr. Takeyh. Sure. It is a very bad signal. Patrick 
mentioned in his testimony that we should pay attention to what 
Iranian leaders are saying, and what they are saying is that 
the India-Pakistan model can be applicable to them. Namely, 
after initial international outcry, if we just stand firm we 
can regain our commercial contracts, so in essence we can keep 
our nuclear weapons as well as our commercial treaties.
    In my written testimony I have submitted a number of 
citations actually by Iranian officials who say this, that 
steadfastness and strength will eventually lead to evaporation 
of international unity and then normalization of our commercial 
relationship.
    I will say that absolving Pakistan of its nuclear sins 
because it is, a ``valuable ally in the war against 
terrorism''--I actually managed to say that without laughing, 
which is a remarkable degree of self-discipline--and now most 
recently the acceptance of India's nuclear program irrespective 
of that country's snubbing of the NPT for a long time--it is 
very difficult to make the case to the international community 
and to Iranians themselves that we are serious about 
proliferation.
    That is why Iranians say: You people do not care about 
proliferation; it is only about the character of the regime, 
and, therefore, why should we make any concessions anyway, and 
in due course we are going to regain our international 
commercial relationships. So this is not a good day for the 
proliferation cause as such.
    Mr. Lehman. This is one where I have a disagreement, having 
dealt with the Indians and the North Koreans and the Iranians 
all these years. There is almost no relationship we have with 
anybody in the world that does not result in a talking point 
for them. I agree we have to listen to how they play the game, 
how they speak to their domestic audiences; how they speak to 
their international audiences. And, frankly, we are not very 
good, often, at rebutting what are basically rhetorical devices 
for covering up what they are doing.
    All of these parties have done that. When we tried to 
engage North Korea--when the Clinton administration tried to 
engage North Korea under the Agreed Framework--the Iranians 
used that as a major, major attack on why the United States was 
still urging restraint in nuclear dealings with Iran while they 
were engaging with North Korea, which was in violation of the 
NPT. That is a far stronger argument, even though it still is a 
subterfuge for the fact that Iran is violating the NPT, than 
the argument that we are trying to engage the Indians, who are 
not a party to the NPT, to try to get them to move in the right 
direction in terms of supporting NPT, supporting restraint, or 
at least ending their war on the NPT and supporting a broader 
approach to nonproliferation.
    Now, I am no apologist for the Indians. I am certainly no 
apologist for the Pakistanis. But I am not about to give the 
Iranians cheap arguments.
    Senator Obama. I think the question is not so much cheap 
arguments. Two points. One is, we are actually moving forward. 
There is an administration decision that is being made right 
now with respect to India, so this is not retrospective. The 
question is, How does that fit in with our posture toward Iran?
    The second point, I guess, and it is a broader point, and 
then I will stop because I am out of time and I do not want to 
abuse the graciousness of my colleague, Senator Nelson, is it 
strikes me that we have some disarray in terms of how we think 
about the NPT; its structure. There is not sufficient coherence 
as far as I can tell in terms of how we are approaching a lot 
of these problems. It needs to be updated. We missed that 
opportunity just recently, and I think this underscores how 
important it is for us to think about Iran specifically, but 
also think more broadly about how do we make sure that the NPT 
is meeting current challenges and closing loopholes, something 
that we have been failing to do.
    Thank you, Mr. Chairman.
    Dr. Clawson. Senator, if I may just make a quick comment on 
that. It may be a problem for our nonproliferation policy, but 
the Iranian leaders' view that friendly countries to the United 
States can get away with lots of things, whereas hostile 
countries get penalized, is, in fact, something which is 
helping us with regard to the Iranians, in that they have 
concluded that they are subject to particularly harsh penalties 
because they are unfriendly to us.
    So that may be a problem for our overall NPT policy, but 
for solving this particular Iran policy the Iranian conclusion 
that if you are friendly to the United States you can get away 
with bloody blue murder, but if you are opposed to the United 
States you cannot spit on the sidewalk, actually helps us in 
the relations with Iran.
    Senator Obama. Well, what it certainly does is it makes 
Iran unable to anticipate or predict entirely what our 
intentions are.
    The Chairman. Senator Nelson.
    Senator Bill Nelson. Of course, a big difference between 
India and Iran is that Iran has a declared policy to want to 
eliminate another country and with such a state policy, to give 
them the means by which to achieve it is a big difference. Any 
comment?
    Dr. Takeyh. In terms of elimination of Israel? Well, if I 
am Pakistani I am sort of concerned about India's nuclear 
proliferation from an equally existential perspective.
    I do not believe Iran should have nuclear weapons. I do not 
believe it should have nuclear weapons capability. I do not 
think it is inevitable for it to have either. I think there are 
many things that the international community can do to prevent 
that. I think that if Iran crosses the threshold it is a 
failure of American imagination, it is a failure of 
international resolution, it is a failure of international 
diplomacy, and all those things are avoidable.
    I never understood the argument that, well, Iran is going 
to have these weapons, so let us just think about containment. 
To me that is a profoundly un-American argument. This is the 
country that built the Panama Canal and beat Hitler, and we are 
just going to acquiesce to Iran having weapons capability? I 
think there are diplomatic routes out of this still. The hour 
is late, but it is not too late.
    Senator Bill Nelson. I want to ask you about that. And, Mr. 
Lehman, if you would chime in, too. You see a diplomatic route 
out of this and yet Iran has rebuffed the European proposal for 
negotiations. It has now turned down, according to the morning 
newspaper, the Russian proposal for a second time. So what is 
the route using negotiations?
    Dr. Takeyh. Well, I would have to offer my seven-party 
talks again. In my written testimony I have a proposal. As I 
said, it has poor reception everywhere. It is here today. It 
draws on a very imperfect model, the six-party talks with North 
Korea. That is almost always difficult to offer that, as 
Patrick said, as a smashing success.
    But I do think that for these negotiations to work, if they 
are going to work--and they may not; I am prepared to accept 
that they may not work; I offer no panaceas--the United States 
would have to be involved in these negotiations. If you accept 
my assumption--you may not--that Iran would like these weapons 
not for global domination, but as a weapon of deterrence 
against a range of external threats, most centrally the United 
States, if you accept the argument that this is a weapon of 
deterrence as opposed to power projection, then lessening of 
the country's security concerns, security anxieties, could 
diminish its nuclear appetite.
    The only country that is capable of doing that at this 
moment is the United States of America. The European 
negotiations that you talked about, what security guarantees 
can Germany make? The European negotiations took place on the 
three baskets: The security discussions, economic discussions, 
and technology transfer. The Europeans were incapable of 
offering what Iran wanted on any of those three. Security 
guarantees--Iran is not surrounded by German troops; they are 
surrounded by American troops. Economic concessions--Iran's 
inability to be integrated in the global economy stems from 
American prohibitions and its own doing, as opposed to European 
sanctions. Technology transfer--it is inconceivable for Iran to 
have high-level technology without American approbation.
    So the United States is central to this project, to this 
process, and if it is uninvolved then these negotiations are 
inevitably going to fail. They may produce interim suspensions, 
but they will not resolve the issue in a conclusive manner.
    Now, should the United States become involved in a seven-
party format, eight-party format, whatever contact groups you 
want? Would they necessarily succeed? It may fail. That is why 
I think any negotiations within Iran has to be a very limited 
timeframe, 6 months, 4 months, and not beyond that. They should 
not drag out, as the North Korean talks.
    I am not saying it will work, but you will never know if 
you do not try it.
    Senator Bill Nelson. Mr. Lehman.
    Mr. Lehman. Senator, you asked me to address this question 
of the path and I will do my best. The biggest problem we have 
in dealing with the nonproliferation regime and its core, the 
Nonproliferation Treaty, is that you are trying to apply 
universal rules and principles to what are different 
circumstances. So I think Senator Obama is correct; there is a 
lot of confusion about how you do that. But I would argue there 
are coherent policies and paths and that we can understand what 
those are.
    I think that Iran is a good example of the need to shape 
the process to deal with the culture, the security conditions, 
the economic interactions, and we have got to do that.
    Now let me say, I am somewhat lukewarm about the contact 
group proposal myself, but let me explain my thinking and maybe 
Ray and I will come to a common view. Let me use the example of 
North Korea. It is a dangerous region. We had a package. It was 
the NPT-plus with the North-South Denuclearization Agreement, 
the IAEA safeguards, the South Koreans are going to have 
inspections in the North and vice versa. It really looked like 
it was going somewhere.
    Then what happened? Well, we discovered that, despite all 
of that, the North Koreans were still running the program and, 
in fact, had developed a very large reprocessing facility which 
they had just begun to use. Everybody seemed united. We just 
had this great head-of-state summit, a Security Council 
resolution that further proliferation was not unacceptable but 
a threat to international peace, which is the code word for we 
really mean it.
    Now, a year later what happens? The Security Council will 
not endorse Hans Blix's request to do a special inspection in 
North Korea. What happens to all of this plea for 
multilateralism? The answer was: Turn to the United States and 
say: Uncle Sam, hey, why don't you guys go deal with this?
    So we got off track because the international community 
said basically, is this not something they have got to deal 
with the United States? And we lost the support. We ended up--
we tried again and again by various means, some better, some 
worse, but all well intended, to try to address, as I think Ray 
correctly says we have to, the broader security and economic 
issues in North Korea.
    In the end, why did we end up in six-party talks? The 
answer was that basically the United States, by itself, cannot 
solve the problem. It requires the help of other people and we 
have to be a part of that.
    But what we have never done on North Korea is get the 
international community to stand firm and say this is what it 
is all about. So, before we go off and get Uncle Sugar to take 
the heat, I think what we need to do is get the international 
community to say: All right, are you here or not? And if this 
is the end of the Nonproliferation Treaty, if it is over, we 
know what to do about that. But let us find out now.
    Senator Bill Nelson. But we have not been able to get the 
international community to step up to the plate.
    Dr. Clawson. I disagree with that, Senator. I actually 
think that in the current negotiations the French position is 
tougher than ours. Indeed, I would say that the position being 
taken by the E3, the EU3 big countries--Britain, France, and 
Germany--in these negotiations is pretty darn good, pretty darn 
tough.
    Senator Bill Nelson. But not Russia. Russia just gives Iran 
an excuse to delay.
    Dr. Clawson. I thought the Russians were just going to play 
an obstructionist role and I was, frankly, quite shocked when 
the Russians instead said: All right, we are going to make a 
real effort.
    Certainly, my discussions in Moscow, this fall, found there 
is a broad understanding in the policy elites in Moscow that a 
Russian nuclear program is a real problem for them and they are 
making a real effort to try and solve it. That is kind of 
surprising. The Russians are not being so helpful on lots of 
things these days, but at least they are making a real effort 
on this one.
    So I think it is rather surprising the last few years how 
much the E3 has stepped forward to try and solve this and taken 
a tough stance and not given in. The E3 is refusing to 
negotiate with the Iranians right now. That is an unnatural 
stance for them, to refuse to negotiate. They say Iran has to 
reinstate the freeze.
    Senator Bill Nelson. So, Dr. Clawson, you would endorse Dr. 
Takeyh's seven-nation----
    Dr. Takeyh. I do not think he would.
    Dr. Clawson. Well, actually it already--what I find amusing 
about this is it already exists, and that Secretary Rice after 
all attended that dinner with the Foreign Ministers of the six 
countries that he is talking about that was arranged in London 
by Jack Straw. It already exists. The Foreign Ministers of 
those six countries are already conferring with each other 
about what to do about Iran and reaching agreement. They are 
conferring as a collective group. If the Iranians want to meet 
with them, they can.
    Senator Bill Nelson. I like your optimism. It is the only 
positive thing that I have heard. You are talking about the 
Russians and there is some degree of optimism there, but when 
it comes to the Security Council, what are the Russians going 
to do at the next Security Council meeting? So the picture gets 
murkier and murkier.
    Thank you, Mr. Chairman.
    The Chairman. Well, thank you very much, Senator Nelson.
    Let me just add to my colleagues' questions. The Indian 
agreement has come into the discussion a bit because this is a 
current event which is very important. Each of you have sort of 
a different slant on what ought to occur there. One argument 
with regard to helping India with fissile material and nuclear 
technology is that this may have a substitution effect with 
regard to their need for Iranian hydrocarbons, in essence, and 
that case could be made for a number of nations around the 
world.
    If you are serious about lessening the bargaining power of 
Iran, why, we already talked without great specifics about our 
own country, how rapidly we get into alternative fuels, hybrid 
cars, clean coal technology, all the rest of it. Some of us 
take that very seriously for the very reason that we are 
talking about Iran today. Essentially, without there being that 
degree of serious purpose on the part of the American public 
and American politicians, the Iranians make some assumptions 
from that.
    So my reason for dwelling on facts for the American public 
is that, ultimately, there must be a constituency for the 
actions that our foreign policy has here. We are talking in 
academic terms about possibilities, but the President, Members 
of the Senate and House, and some of you will have to discuss 
with actual constituents what are the consequences of Iran 
having nuclear weapons.
    Dr. Lehman has discussed these pretty graphically not only 
after his recent trips, but in the past. The potential for a 
number of nuclear states in a very small area, given the 
instability of those regimes or the volatility of leadership 
and so forth, is potentially catastrophic for them. But, 
likewise, then we discuss, What are the consequences for us? 
Are there some Americans who would say, well, if that is the 
nature of those countries and they attack each other, that is 
very sad in a humanitarian sense, but it is over there; it is 
not here? That used to be a big tenet of our assumption. Maybe 
that still is true.
    We have had some colloquies with business leaders at a 
roundtable once again about energy this week here in this body. 
Many people still do not really assume that the price of 
gasoline at the pump is not $2, but more like $20 after you 
factor in the military we have in the area, and all the 
commitment of our national defense budget to that. What if 
Americans decided we really are tired of military involvement 
in the area? The Iranians would have nothing to worry about. We 
are pulling everybody out. So that that is a different set of 
assumptions. For the moment they cannot assume that. We are 
there and quite a presence, right next door as well as in other 
situations.
    But some in the American body politic would say that we 
ought not to be there or that we ought to have a timetable of 
weeks, months, and so forth to be out of there altogether.
    So what I am trying to assess from each one of you is how 
we get to the kinds of arguments that are going to have to be 
made about potential action here that is credible to ourselves, 
as well as to our allies, who see some constancy in this, and 
finally to the Iranians or others who might have designs on 
nuclear material and nuclear weapons over there.
    You have been helpful in that respect, but I am still 
trying to come to grips with the issue. I am raising the same 
questions with members of our administration, as opposed to 
generally discussing options that are on or off the table, to 
get very specific about the potential costs. So that when I go 
to my constituents in Indiana I may say, this is a very, very 
serious problem. The consequences of our dealing with it in 
this way or that way are likely to have these ramifications for 
your lives, for your business, for whether we have growth in 
Indiana or in the United States or not. On the other hand, our 
failure to deal with them may lead to a seemingly interminable 
set of destructive activities that will also have an effect 
upon your business, your lives, whatever may be involved.
    In other words, we have got to broaden the conversation in 
this country because we are coming up to some very difficult 
decisions and if they are made without constituent support and 
without broad information the staying power or the credibility 
of this is not going to be what it needs to be. Given the 
stretching of our Armed Forces as we now have them, the fact 
that we are running a $400 billion deficit, domestically, in 
the country, $700 billion in terms of foreign trade, this is 
sort of a backdrop of the world economy and of ours, 
specifically, as we approach each of these particular steps.
    So I do not want to dwell on this excessively, but we 
appreciate your testimony, to try to initiate our own study for 
the benefit of ourselves, but likewise for the public that may 
be interested in the questions we are raising.
    Now, I suppose I want to ask, specifically--we have talked 
about the seven-power negotiations, the fact that at the 
Foreign Ministry level some of this may be proceeding now, as 
it is in North Korea. One of the things we have learned in our 
committee hearings is that we may not have made great progress 
with the North Koreans, but it is possible that American 
diplomats have made a lot of progress with the Chinese 
diplomats. Because we had some proximity to other negotiators 
around the world, we were taking, seriously, problems together.
    The assumption, that right away we would come to the same 
national interest, was probably naive, but I note the fact that 
we are beginning to identify more common national interests 
with the Koreans, both North and South with the Chinese, 
certainly with the Japanese, and even with the Russians on 
occasion as they come into this thing. That might be the case 
with Iran likewise. It may be that it has been healthy.
    I saw a group of people, the comparable group from Great 
Britain yesterday, their version of the Foreign Relations 
Committee. We met over in S-116 for a while and we talked a lot 
about Iran as well as other things. The fact is that we are 
coming to a better idea of the parameters of this problem, of 
the consequences for all of us, by having these contacts.
    I applaud Secretary Rice for her push to get us involved 
more with the European 3 and with all of the examination of 
this in a way that, perhaps, we were not as much as we should 
have been before.
    So the negotiation route still, I think, has some promise, 
but only if it is informed by the facts, the consequences that 
are more broadly understood, by us as well as the Iranians and 
by our friends who are involved, and maybe by other interests 
that come in. There are ways that we can be helpful to the 
Indians or the Chinese or the Japanese or anybody who also has 
a stake here. It may be our negotiation on other issues in 
which they have interests that may have to enter into this, as 
opposed to the purity of just Iran and Iran, specifically. I 
invite your thoughts on that final point. Are there other 
interests in the world that are going on presently, that in 
some way might affect our effectiveness in getting this 
international coordination, in getting the votes at the United 
Nations, as a matter of fact, in being effective 
diplomatically, as opposed to finally saying at the end of the 
day, we may fail, because I am not sure what that means, what 
failure at this point means. Does it mean that we accept the 
fact that Iran has a program and that they are going to 
eventually proceed to do whatever they are going to do, and if 
we say OK, we will define deterrence as our object and if you 
do something very bad we will hit you? Is that really the end 
of the day? And if so, give us at least some final thoughts, if 
you can, each of you a summary, of how you see this hearing?
    Dr. Clawson.
    Dr. Clawson. Senator, if I may say so, my impression is 
from conversations with leaders from most of the countries 
involved in the negotiations, is that their concerns are, at 
least, as much the Nonproliferation Treaty and the 
nonproliferation system as they are the particular character of 
the Iranian regime, and that one of the reasons that there has 
been such an active role played by some countries that, 
otherwise, you might expect to be much more in the back seat 
about these matters is because of the depth of their commitment 
to the global nonproliferation regime.
    We, in fact, do not serve our own interests well when we 
think that it is commercial concerns by countries like Russia 
and China, much less France and Germany and Britain, that are 
driving their position on this matter. Really it is a genuine 
concern about solving this global proliferation problem which 
is at the heart and core of the decisionmaking in all of the 
countries involved.
    The Chairman. You really believe the publics in those 
countries, quite apart from their leadership, have the same 
interest in the NPT?
    Dr. Clawson. No, I do not think most of the public is 
engaged and thinking about it. There has not been the kind of 
process that you described in many of the countries. There has 
in some. Intriguingly, in a country like Germany there is much 
more public concern about the NPT than there are in some other 
countries. So that is one of the reasons why there is 
considerable German public support for taking a strong stance 
on this matter.
    The Chairman. Mr. Takeyh.
    Dr. Takeyh. I think you are absolutely right in one sense, 
Senator. We have to be honest with our allies and public about 
the costs of confrontation and the sacrifices that that would 
involve. In terms of our allies, we have to let them know that 
they will have to put their commercial interests at stake and 
that is the price to be paid if we are going to go down the 
path of coercion, confrontation, and isolation of Iran.
    We have to be honest with our public that perhaps that 
confrontation will lead to economic consequences in terms of 
oil shortages, that we will have an increased level of 
expenditures for gas, and that has all kinds of industrial 
implications in America, not just in terms of transport 
services.
    We have to also be honest that a confrontation with Iran 
may play itself out in Iraq, where the Iranians have an 
infrastructure that is capable of extending our casualty rates, 
retarding the development and reconstruction and rehabilitation 
of Iraq and, therefore, prolonging the American occupation of 
that country.
    So this is a very dangerous road we are going on and 
everyone has to understand the stakes and everyone has to 
understand the sacrifices that are involved. I do not believe a 
confrontation is inevitable, but if you are going to go down 
that route then you have to prepare your allies and the public 
for its consequences and repercussions.
    In terms of Iran, international community, and the United 
States, I do not believe we should offer concessions to every 
other country in order to gain compliance, their agreement with 
us on Iran. I do not believe we should exonerate India of its 
nuclear proliferation sins in order to gain a vote in the IAEA. 
I do not believe we should stop criticizing the lack of 
democracy in Russia and the retardation of any democratic 
process in order to gain some sort of Russian leverage. I do 
not believe we should subordinate all our security and 
political concerns to Iran. But we should deal with Iran in a 
more realistic way.
    The Chairman. Just following up on that, though, What do 
you finally mean? In other words, as each of these countries 
becomes disenamored with us or whatever our policy is and 
indicates that for various reasons, even procedurally, it is 
not as convenient to vote right now or to move ahead, does this 
not leave us more and more isolated in the process as we 
continue?
    Dr. Takeyh. I do not believe at the end of the day we are 
going to get international compliance with measurable economic 
sanctions against Iran, the type of intrusive economic 
sanctions that will make an impression on that country's 
nuclear deliberations. So these concessions we are making 
ultimately are unlikely to be successful in terms of the 
ultimate objective of disarmament of Iran anyway.
    The Chairman. Mr. Lehman.
    Mr. Lehman. All of the nations whose actions will be 
essential to be successful with Iran have multiple interests. 
They have economic risks, security risks. They are going to 
balance all of these things.
    Having said that, I am struck by not so much the difference 
in the three witnesses, but the similarities of our views and 
by the fact that that is what I find if I go to Europe, that is 
what I find elsewhere, is that more and more at sort of the 
policy wonk level there is more and more cohesion about what it 
is that we need to think about. So I think if the West holds 
firm we have got a real shot at this.
    Now, I have said ``the West.'' What I mean is the 
Europeans, Northeast Asia, us, North America. But I think that 
we need to remember that still two key players are Russia and 
China, and we cannot pander, but at the same time there are 
several things that matter to Russia and China that play in the 
Iranian case. Some of those are related actually to security, 
but the most obvious and public have been the economic. But I 
think we also ought to remember that there are political 
factors. They already have nuclear weapons. Their status 
problem is they want to be players, and they can decide, do 
they want to be players who gain their status by being in 
opposition or do they want to be players because they can make 
meaningful contributions to something that everybody supports. 
I think that is the theme and the approach that we ought to 
take.
    Thank you, Mr. Chairman.
    The Chairman. Well, we thank all three of you for your 
papers as well as for your forthcoming responses. This is an 
area that the committee will continue to explore, as you would 
hope, I am sure, and we look forward to consulting with you.
    Thank you for your appearance. The hearing is adjourned.
    [Whereupon, at 12:43 p.m., the hearing was adjourned.]
                              ----------                              


       Additional Questions and Answers Submitted for the Record


 Responses of Dr. Ray Takeyh to Questions Submitted by Senator Barbara 
                                 Boxer

    Question. In December 2002, the world discovered that Iran had 
secret, undeclared nuclear sites, including a uranium enrichment 
facility and a heavy water production facility. Since that time, 
inspections carried out by the International Atomic Energy Association 
have confirmed Iranian efforts to enrich uranium, separate plutonium, 
and import materials from the likes of the Pakistani nuclear smuggler, 
A.Q. Khan.
    Yet despite these developments, the Bush administration did not 
develop a viable policy on Iran, but instead launched a war of choice 
against Iraq. Tragically, 3 years later, it appears as though the big 
winners of the Iraq war are the mullahs in Iran.
    By launching a war against Iraq--a country with no nuclear weapons 
program--we have strengthened Iran's position in the Middle East and 
hurt our ability to respond.
    Not only is the U.S. military bogged down in an increasingly 
violent war in Iraq--which has severely weakened the U.S. ability to 
exert pressure on Iran--but Iraq's Government is now headed by a pro-
Iranian slate of Shiite political parties.
    Iran's Foreign Policy Chief proudly touted this fact in a recent 
interview with Time Magazine, saying that ``when the Americans 
supported Saddam, all the present leaders [of Iraq] were our guests, 
including Talabani, Barzani, Jaafari, Hakim, and all those. The reason 
for our friendship is that it goes back many years.'' And, the 
friendship is getting stronger.
    In a historic move, Iraqi Prime Minister Ibrahim al-Jaafari paid a 
visit to Iran last year, in which he laid a wreath on the tomb of the 
Ayatollah Khomeini--the man behind the hostage crisis and several 
terror attacks against Americans.
    The Iranian Government also offered a $1 billion credit line to 
Iraq and the two countries signed military agreements.
    While the Iraqi Government asserts that these agreements are solely 
for peaceful purposes, there is no doubt that Iran supports Shiite 
militias, including the lethal ``Badr brigades'' which have been 
implicated in horrific reprisal attacks against Sunnis.
    It has also led to sophisticated weaponry--such as massive roadside 
bombs--finding its way into Iraq at a horrible cost for U.S. troops.
    The U.S. Director of National Intelligence recently said that 
Iran's goal is to cause the United States to experience ``continued 
setbacks'' in its drive to stabilize Iraq. And we know that last week's 
violence in Iraq pushed the United States to the brink of all the 
``setbacks'' it can handle.
    Do you agree with experts such as University of Michigan Professor 
Juan Cole who says that the biggest winner in the Iraq war is Iran?

    Answer. I do agree with Professor Cole that the biggest winner in 
Iraq today is Iran. However, there is not need for a zero-sum game, 
namely everything that is in Iran's advantage is necessarily to the 
disadvantage of the United States. The fact of the matter is that the 
goals of the United States and Iran do somewhat coincide in Iraq. Iran 
seeks to maintain Iraq's territorial cohesion, prevent the Sunni 
domination of its politics and empower the Shiite community. The 
Iranian theocracy does not seek to export its revolution next door, but 
merely ensure better set of interlocutors next door. Given that much of 
the turbulence in the Persian Gulf era for the past three decades has 
been due to poor relations between Iran and Iraq, better relations 
between those two countries is not necessarily bad for America.

    Question. Two weeks ago, I suggested to Secretary of State 
Condoleezza Rice that the United States has a ``tin ear'' to the Middle 
East.
    Prior to the Iraq war, the Bush administration suggested that the 
Iraqi people viewed the United States as their ``hoped-for liberator.'' 
But almost 3 years later, the violence in Iraq is continuing to 
escalate: 2,298 U.S. troops have lost their lives, and 73 percent of 
Iraqis believe that there will be greater cooperation among Iraq's 
political factions when the United States leaves the country.
    Meanwhile, U.S. policies have helped galvanize hard-liners and 
nationalist sentiment in Iran, contributing to the election of Mahmoud 
Amadinejad over former President Hashemi Rafsanjani. I'm afraid this 
suggests that we may not be fully in touch with the sentiments of the 
Iranian people.
    My question to you is: Where are the Iranian people on the question 
of nuclear weapons? Is there widespread support within Iran to strike a 
deal with the international community and permanently forgo the 
development of nuclear weapons?
    Jim Muir--the BBC's Tehran correspondent has suggested that ``many 
[Iranians] would be proud if they did join the nuclear club,'' and that 
the issue of obtaining a nuclear bomb has ``become an issue of national 
pride.''
    How broad is popular support for a nuclear capability within Iran? 
Is that support for a bomb, or solely for a peaceful nuclear capacity?

    Answer. It is a popular refrain in Washington today that 
Ahmadinejad has been the best thing that has happened to America. In 
fact, the Bush administration's diplomacy of threats and coercion is 
also the best thing that has happened to Ahmadinejad. He has cleverly 
used the nuclear issue and America's belligerence to consolidate his 
powerbase, deflect attention from the domestic deficiencies of the 
regime and undermine his more moderate foes. The nuclear issue and its 
nationalistic appeals can only help the hard-liners.

    Question. While I enthusiastically support U.S. aid to prodemocracy 
efforts within Iran, I think that it is terribly important that this 
money be used wisely given our record on initiatives such as these, and 
I am specifically referring to the debacle with Ahmad Chalabi and his 
Iraqi National Congress.
    As you will recall, the Bush administration paid Chalabi over $32 
million over a 4-year period, and the information that he provided, 
much of which was used to justify the invasion of Iraq, turned out to 
be useless, misleading, and even fabricated. Furthermore, Mr. Chalabi, 
the exile ``of choice'' to Deputy Secretary of Defense Paul Wolfowitz, 
also may have provided sensitive information to Iran.
    In light of President Bush's recent request for $15 million to 
support, among other things, ``Iranian political organizations,'' how 
can we ensure that we do not run into another Chalabi-type debacle?
    How can we ensure that this money is spent wisely?

    Answer. Below, please see a piece that a colleague and I did in the 
Los Angeles Times on the faulty assumptions of Secretary Rice's 
democracy promotion efforts in Iran.

              [From the Los Angeles Times, Feb. 26, 2006]

                       The Wrong Way to Fix Iran

                 (By Charles A. Kupchan and Ray Takeyh)

    The Bush administration quietly orchestrated a major shift in U.S. 
policy toward Iran this month, requesting $85 million from Congress to 
help bring about regime change in Tehran. Washington is now seeking not 
just to contain Tehran's nuclear ambitions but also to topple the 
Iranian government.
    The war in Iraq has made all too clear the high cost of using 
military force to attain regime change. Accordingly, the administration 
is taking a page from Eastern Europe, where the United States used 
radio broadcasts and direct assistance to opposition groups to help 
undermine authoritarian governments and promote democracy. 
Administration officials explicitly cited Poland's Solidarity movement 
as a model.
    Although democratizing Iran is a worthy objective, the 
administration is making a mistake in embracing a strategy for regime 
change based on the European experience. Conditions in Iran bear little 
resemblance to those that accompanied the downfall of dictatorial 
regimes in Europe, making it likely that the administration's new 
strategy will backfire and only strengthen Tehran's hard-liners. 
Instead of isolating Iran and seeking to undermine the regime from the 
outside, Washington should engage Iran, bringing about a natural 
process of political reform from within.
    Across Eastern Europe, the opposition movements that toppled 
communism--and have more recently brought democracy to places such as 
Georgia and Ukraine--were avowedly pro-American. Dissidents were only 
too happy to receive assistance from Washington and to identify 
themselves with U.S. policy. Alignment with the U.S. remains a valuable 
political asset for Europe's new democracies.
    Not so in Iran. A pronounced suspicion of the U.S. spans the 
political spectrum. The Bush administration's rhetorical--and now 
financial--support for the Iranian people only makes life more 
difficult for the democratic advocates it is intended to buttress. 
Iranian conservatives continue to respond to U.S. ``interference'' by 
cracking down on dissidents whom they portray as a ``fifth column.'' 
Even those reformers with pro-American inclinations have been forced to 
cover their backs by denouncing American belligerence.
    In Eastern Europe, the regimes felled by democratic revolt were 
brittle and illegitimate; they had long been discredited in the eyes of 
their citizens. In contrast, Iran's current regime enjoys considerable 
popularity. President Mahmoud Ahmadinejad has been quite adept at 
wrapping himself in the mantle of nationalism. The Bush administration 
fails to appreciate that its coercive diplomacy on the nuclear issue is 
undercutting its effort to drain support from Iran's leaders.
    The centralized regimes of Eastern Europe also maintained tight 
control over the media, so U.S. broadcasts and the covert distribution 
of information played a vital role in fostering democratic debate. Such 
measures will prove far less effective in Iran, where access to 
cellphones, the Internet and satellite TV is widespread. Although Iran 
does not have a free press, domestic debate is reasonably pluralistic.
    The U.S. has a stake in Iran's internal power struggles, and the 
administration is right to want to undermine Iran's reactionary 
clerics. However, the best way to do so is to offer the Iranian people 
not radio broadcasts in Farsi but the realistic prospect of integration 
into the international community. Doing this gradually, starting with 
the World Bank and the World Trade Organization, the U.S. can encourage 
Tehran to embrace decentralization, accountability and transparency--
political practices that ultimately will bring down Ahmadinejad and his 
firebrand conservatives.
    Moreover, Washington would be investing in a repository of goodwill 
within Iran, essential to nurturing a new generation of reformers that 
sees the U.S. as a prospective partner rather than the Great Satan. 
Coercive threats are needed to persuade Tehran to abandon its efforts 
to acquire the technology to produce nuclear weapons. But those threats 
must be accompanied by credible promises of political normalization 
should Tehran veer from its belligerent policies. Otherwise, only the 
hard-liners--who rely on external demons and isolation from the 
international community to justify their monopoly on power--benefit.
    Eastern Europe's would-be democrats knew that the West was waiting 
for their countries with open arms, encouraging them to take the 
earliest opportunity to discard their repressive regimes. In a region 
still beset by deep distrust of American motives, Iran's progressives 
now need the same assurance.

    Question. During a ``World without Zionism'' conference in Tehran 
last October, Iranian President Mahmoud Ahmadinejad called for Israel 
to be ``wiped off the map.''
    The Director of National Intelligence, John Negroponte, testified 
on February 2, 2006, that Iran ``already has the largest inventory of 
ballistic missiles in the Middle East.'' We have known for some time 
that Iran is capable of striking Israel with these missiles.
    And, according to the Nuclear Threat Initiative, a large number of 
Iran's ballistic missiles currently possess the capability to deliver 
chemical, biological, or radiological dispersion warheads.
    I am not just concerned about Iran's advancing nuclear program and 
the possibility that it may possess nuclear weapons 5-10 years from 
now. I am concerned about the threat posed by Iran, today, to both 
Israel and U.S. forces serving in the region.
    How serious is this threat?

    Answer. It has always been my perception that Iran seeks a nuclear 
weapons capability as a means of ensuring a viable deterrent posture 
against an evolving range of threats, particularly the United States. I 
don't believe that Iran seeks a nuclear

weapon in order to destroy Israel. During the past three decades Iran 
has been relentlessly hostile to Israel, but it is a hostility 
expressed through sponsorship of militant Palestinian groups and 
Hezbollah, as opposed to a more direct military confrontation.

                                  
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