[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]




                               BEFORE THE

                      COMMITTEE ON FOREIGN AFFAIRS
                        HOUSE OF REPRESENTATIVES


                             FIRST SESSION


                            DECEMBER 2, 2015


                           Serial No. 114-135


        Printed for the use of the Committee on Foreign Affairs

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                      COMMITTEE ON FOREIGN AFFAIRS

                 EDWARD R. ROYCE, California, Chairman
ILEANA ROS-LEHTINEN, Florida         BRAD SHERMAN, California
DANA ROHRABACHER, California         GREGORY W. MEEKS, New York
STEVE CHABOT, Ohio                   ALBIO SIRES, New Jersey
JOE WILSON, South Carolina           GERALD E. CONNOLLY, Virginia
MICHAEL T. McCAUL, Texas             THEODORE E. DEUTCH, Florida
TED POE, Texas                       BRIAN HIGGINS, New York
MATT SALMON, Arizona                 KAREN BASS, California
DARRELL E. ISSA, California          WILLIAM KEATING, Massachusetts
TOM MARINO, Pennsylvania             DAVID CICILLINE, Rhode Island
JEFF DUNCAN, South Carolina          ALAN GRAYSON, Florida
MO BROOKS, Alabama                   AMI BERA, California
PAUL COOK, California                ALAN S. LOWENTHAL, California
RANDY K. WEBER SR., Texas            GRACE MENG, New York
SCOTT PERRY, Pennsylvania            LOIS FRANKEL, Florida
RON DeSANTIS, Florida                TULSI GABBARD, Hawaii
MARK MEADOWS, North Carolina         JOAQUIN CASTRO, Texas
TED S. YOHO, Florida                 ROBIN L. KELLY, Illinois
CURT CLAWSON, Florida                BRENDAN F. BOYLE, Pennsylvania
REID J. RIBBLE, Wisconsin
DAVID A. TROTT, Michigan
TOM EMMER, Minnesota Until 5/18/15 deg.
DANIEL DONOVAN, New York As of 5/19/15 deg.

     Amy Porter, Chief of Staff      Thomas Sheehy, Staff Director

               Jason Steinbaum, Democratic Staff Director
                            C O N T E N T S



Mr. Ali Alfoneh, senior fellow, Foundation for Defense of 
  Democracies....................................................     5
Mr. Scott Modell, managing director, The Rapidan Group...........    57
Mr. Daniel Benjamin, Norman E. McCulloch Jr. director, The John 
  Sloan Dickey Center for International Understanding, Dartmouth 
  College (former Ambassador-at-Large and Coordinator for 
  Counterterrorism, U.S. Department of State)....................    65


Mr. Ali Alfoneh: Prepared statement..............................     7
Mr. Scott Modell: Prepared statement.............................    59
Mr. Daniel Benjamin: Prepared statement..........................    67


Hearing notice...................................................   102
Hearing minutes..................................................   103
The Honorable Brad Sherman, a Representative in Congress from the 
  State of California: Material submitted for the record.........   105
The Honorable Gerald E. Connolly, a Representative in Congress 
  from the Commonwealth of Virginia: Prepared statement..........   112
The Honorable Christopher H. Smith, a Representative in Congress 
  from the State of New Jersey: Questions submitted for the 
  record.........................................................   114



                      WEDNESDAY, DECEMBER 2, 2015

                       House of Representatives,

                     Committee on Foreign Affairs,

                            Washington, DC.

    The committee met, pursuant to notice, at 10:09 a.m. in 
room 2172, Rayburn House Office Building, Hon. Edward Royce 
(chairman of the committee) presiding.
    Chairman Royce. This hearing will come to order. Iran and 
its Islamic Revolutionary Guard Corps have really been on a 
roll, and that is the subject of this hearing today. And I want 
to thank our witnesses for being with us.
    Let me start by just giving my observations on recent 
events. So over the last few weeks, the IRGC has tested a new 
long-range ballistic missile, and that test is in violation of 
the U.N. sanctions. They also released a video of dozens more 
of these ICBMs staged in an underground bunker. The IRGC Quds 
Force has stepped up efforts in support of the murderous Assad 
regime in Syria, and we have seen those attacks on the ground. 
And by all accounts it appears that the IRGC has prevented 
international investigators from assessing the information 
needed to conclusively finish a report on the possible military 
dimensions of Iran's nuclear program. It is on IRGC territory, 
    From nuclear proliferation to support of international 
terrorism, to human rights abuses, the IRGC has made Iran the 
global menace that Iran is today. The IRGC is responsible for 
squashing democracy movements at home, for spreading the 
Iranian regime's revolutionary ideology abroad, and for 
sparking turmoil throughout the Middle East. Its forces operate 
again, independent of Iran's regular army. It answers directly 
only to one man, Iran's Supreme Leader.
    While most understand the role of the IRGC in fueling 
conflict throughout the region, its hidden grasp on the Iranian 
economy is just as important. People don't realize that most of 
the major businesses were nationalized basically and turned 
over to the IRGC to control. So they have about 30 percent of 
the Iranian economy. The IRGC has been labeled Iran's ``most 
powerful economic actor'' by the U.S. Treasury Department, 
which has noted its deep reach into ``critical sectors of 
Iran's economic infrastructure.'' The IRGC's biggest, largest 
entity is this construction arm which controls 800 affiliated 
companies. That it also controls billions of assets, is often I 
think lost, on the public here. The fact that much of the money 
that is held in escrow that when released is going to flow 
through the IRGC, I think that point has been lost on us. These 
activities in turn fund Iran's ballistic missile program, its 
military activities, its regional aggression.
    Of course none of this appears to disqualify Iran from 
receiving sanctions relief under a nuclear deal that allows 
Iran to keep a path to a weapon. Within months Iran could have 
access to tens of billions in new cash as this money comes out 
of escrow. And this, what I call a ``stimulus package,'' this 
stimulus package for the Supreme Leader will only strengthen 
the IRGC. And as trade restrictions with Iran loosens, that in 
turn of course, will increase its access to dual-use technology 
for its military and its missile programs.
    An IRGC with more cash means more threats to the United 
States and our allies. Even when Iran's sanctions were fully in 
place, Iran's support to the Assad regime in Syria totaled 
every year $6 billion. I am going to guess now that that is 
going to go up. IRGC support on the ground, combined with 
Russian air support, worsened the already horrible conflict in 
Syria, drawing in foreign fighters and giving ISIS room to 
    And more resources for the IRGC also promises to create 
problems in Iraq, and in Yemen--where the guards are backing 
Shia militias responsible for violence against Iraq's Sunni 
minority and against the Houthi rebels fighting Saudi forces in 
Yemen. This combined with Iran's continued support for 
terrorist groups such as Hezbollah and Hamas--and I will just 
remind people that the other story that surfaced a few months 
ago, was that the IRGC will now try to transfer--and I think 
this is in direct violation of the agreement--try to transfer 
guidance systems, GPS guidance systems, to the 90,000 rockets 
and missiles that are already in Hezbollah's inventory, and has 
also offered to resupply the inventory that Hamas spent in the 
Gaza war and rebuild the tunnels to boot. So, the major source 
of instability in that region is the IRGC.
    In selling its flawed nuclear deal to Congress, I believe 
Secretary Kerry testified, that there would be no let up on 
Iran's terror and destructive regional behavior. That was my 
takeaway as I listened to his words, but I want to now 
understand how that is going to be followed with action. We 
have yet to see any effective strategy from the administration 
to pushback against IRGC's regional advances which have 
emboldened Iran, which have undermined our allies, and this 
morning we will hear from our witnesses on what such a strategy 
might look like, and how Congress can help.
    And I will now turn to the ranking member for any opening 
comments he may have. Mr. Engel.
    Mr. Engel. Thank you, Mr. Chairman. Thank you for calling 
this hearing, and I want to welcome all witnesses to the 
Foreign Affairs Committee. In the wake of the Paris attacks, 
the world is focused on the fight against ISIS, and 
announcements yesterday by the Secretary of Defense, about new 
measures that we are taking to fight ISIS are welcome, and I 
think that there is obviously a lot more to go.
    We are reminded of the ongoing threat posed by terrorism, 
and so I am glad our committee is focusing on the world's 
leading state sponsor of terrorism, Iran. I want to echo the 
concerns the chairman just mentioned, the fact that Iran is the 
leading state sponsor of terrorism. And in the past several 
years when Iran had no money, it still found money to be the 
leading state sponsor of terrorism.
    Under the deal negotiated with Iran, they will be awash in 
cash. They will have lots of money, and imagine how much 
destruction they can do in support of terrorist activities and 
terrorism. That is very deeply troubling to me, and it was and 
has been throughout our discussions about U.S. relations with 
Iran and the entire nuclear deal with Iran.
    Now, since ceding power in 1979, the Iranian regime has 
built an ugly record supporting terrorist proxies. Let's 
remember this: The seizure of our Embassy in Tehran 1979, the 
bombings of our Embassy in the Marines barracks in Beirut in 
the early 1980s, killing nearly 300 Americans, the attacks in 
Buenos Aires that targeted Israel's Embassy and a Jewish 
community center, the Khobar Towers bombing in Saudi Arabia, 
which also cost American lives, and just a few years ago, a 
plot to assassinate the Saudi Ambassador right here in 
Washington. And every one of these horrible events is covered 
in Iran's fingerprints.
    The Iranian regime uses the Quds Force, an elite unit of 
the Islamic Revolutionary Guard Corps, as a tool to support 
terrorist proxies and spread instability throughout the region. 
And in recent years, Iran's leaders have doubled down on this 
reprehensible policy, and let's just look at what is going on 
today. In Syria, Iran is committed to propping up the Assad 
regime and now is working with Putin in pursuit of that 
objective. So much for P5+1. It has mobilized Hezbollah and 
organized militias composed of Shi'ite fighters from Iraq, 
Afghanistan, and Pakistan to support the regime. It has also 
deployed hundreds if not thousands of the Quds Force fighters 
in a direct combat roll. And the result of Iran's actions, a 
longer, more costly war, a graver humanitarian crisis, and more 
and more innocent lives lost.
    In Iraq, the Quds Force continues to support hard-core Shia 
militias, some of which were involved in targeting American 
troops during the Iraq war. These violent groups drive 
sectarian division, making it harder to build the inclusive 
Iraqi Government necessary to help defeat ISIS. And in Yemen, 
Iran's support for Houthi rebels has fomented a bloody civil 
war that is now spilling over Yemen's borders. Chaos in that 
country has hampered U.S. counterterrorism efforts, focused on 
AQAP, one of the most dangerous Al Qaeda affiliates. Iran also 
supports Shi'ite elements in other Gulf states, including 
Bahrain and Saudi Arabia, that are involved in efforts to 
destabilize those governments. And, of course, the Iranian 
regime has repeatedly expressed its support for wiping Israel 
off the map. By providing a steady flow of missiles to 
Hezbollah and arms to Hamas, Iran is a grave threat to our 
close ally Israel.
    Finally, it is important to note that Iran's support for 
terrorism is not just limited to the Middle East. Just this 
past week Kenyan security forces arrested two men suspected of 
working with the Quds Force to plan attacks in that East 
African nation. This dangerous pattern is one of the reasons I 
remain concerned about the Iran nuclear deal. Once the nuclear 
sanctions on Iran are lifted, the regime will have access to 
tens of billions of dollars in new wealth, and I will bet my 
money that some of it will end up in terrorist coffers.
    So I agree with what the chairman said: Iran was a leading 
and has been a leading state sponsor of terrorism when they had 
no money. Imagine now when they are going to have sanctions 
lifted, how much money they have which will directly go to 
terrorist activities. So in my view, these factors all point to 
the likelihood of greater case and instability in the years 
ahead. So today I hope we can discuss what can be done to 
counter Iran's maligned activities in the region beyond.
    I want to mention just a few areas I think are most 
important. First, we must aggressively enforce terrorism, 
proliferation, and human rights sanctions on Iran. This 
includes existing sanctions on the IRGC, and we should continue 
to designate all entities connected to Iran's support for 
terrorism. We need to send a clear message that working with 
Iranian firms linked to the IRGC is risky business.
    Next, we need to keep making our case to our EU allies and 
others that Hezbollah as an organization, not just its military 
wing, is a terrorist organization and should be treated like a 
terrorist organization. Our friends in Europe try to split 
hairs by saying that only part of Hamas is a terrorist 
organization. The other part is a humanitarian organization. 
Baloney. It is a terrorist organization, and we should say it, 
and our allies should say it.
    We should ramp up our efforts to track the resources Iran 
receives as a result of sanctions relief. We need to know just 
how much money Iran is funneling to these violent groups. We 
need final closer cooperation with our Gulf allies on defense 
intelligence, counterterrorism, maritime security, and other 
key areas. And, lastly, we need to maintain a very close 
security relationship with Israel, our closest ally in the 
region. This includes the negotiation of a new memorandum of 
understanding, or MOU, that reflects the new security 
environment in the region.
    We must also redouble our commitment to supporting missile 
defense systems, including Iron Dome, so that Israel is able to 
defend itself. And I hope going forward Congress and the 
administration do what is needed to pursue those aims. I look 
forward to ideas and insight from our witnesses, and I yield 
    Chairman Royce. Thank you, Mr. Engel. So this morning we 
are joined by a distinguished panel. We have Mr. Ali Alfoneh. 
He is a senior fellow at the Foundation for Defense of 
Democracies. He is an expert on civil military relations in 
Iran as well as the author of ``Iran Unveiled: How the 
Revolutionary Guard is Transforming Iran from a Theocracy into 
a Military Dictatorship.''
    Mr. Scott Modell is managing director of the Rapidan Group, 
and prior to this he served at the Central Intelligence Agency 
where he conducted operations throughout the Middle East, 
including as part of the post-9/11 operations in Afghanistan.
    And we have Ambassador Daniel Benjamin with us. He is the 
Norman E. McCulloch director at Dartmouth College. Previously 
Ambassador Benjamin served as the Ambassador-at-Large and 
Coordinator for Counterterrorism where he was the principal 
advisor on counterterrorism to Secretary of State Clinton.
    And we welcome our panel. Without objection, the witnesses' 
full prepared statement will be made part of the record here. 
And members will have 5 days to submit statements or questions 
or any extraneous materials for the record. And Mr. Alfoneh, 
please summarize your remarks.

                     DEFENSE OF DEMOCRACIES

    Mr. Alfoneh. Good morning, Mr. Chairman, Ranking Member 
Engel. Thank you very much for your kind invitation, and thank 
you for providing me with the opportunity to share my analysis 
with you, along with the members of this distinguished panel.
    You mentioned, sir, the Iranian revolution of 1979 as a 
historical event of the past, and that is, indeed, the American 
perception of the revolution. In Iran, however, the leaders of 
the Islamic Republic, they subscribe to Trotsky's theory of a 
permanent revolution. For them the revolution of 1979, is not a 
historical event of the past which took place and is over. From 
their perspective, the revolution is permanent, is happening 
every single day, and the engine of that revolution, Mr. 
Chairman, is the Islamic Revolutionary Guard Corps.
    This is also why I do not share the optimism of some of my 
colleagues here in Washington who believe that the emergence of 
President Rouhani, his promise of engaging in bilateral talks 
with the U.S., the nuclear negotiations and the deal which was 
negotiated, and even emergence of a common threat of Islamic 
State, is going to make life easier in the Islamic Republic of 
Iran. Because of the very simple reason that President Rouhani 
and his technocratic government, they are not in charge of the 
portfolios which are of interest to us today. The Islamic 
Revolutionary Guards Corps is in control of Iran's regional 
    Let's take a quick look at the problems that I see. First 
of all, as the chairman and the ranking member pointed out, the 
Revolutionary Guard not only is in control of the policy, they 
have also benefitted most financially from the nuclear deal. 
Much of the money which the Government of the Islamic Republic 
has received is going to be channeled to companies owned by the 
Revolutionary Guards, or directly to the military budget of the 
Revolutionary Guards. Apart from this, the Islamic 
Revolutionary Guard is pursuing policy objectives in the Middle 
East region which are in contrast and totally opposed to U.S. 
    The United States desires to see a future of Syria in which 
Bashar al-Assad, who is personally responsible for destruction 
of his own country, does not play a role. The Revolutionary 
Guard's goal is to keep Bashar al-Assad in power, and to that 
effect they are trying to mobilize, and they have managed to 
mobilize, a pan-Shi'ite international brigade to Syria, and 
that deployment of course is increasing the risk of spread of 
the conflict in Syria to other countries. The home countries of 
those militia men, which is primarily Lebanon, Iraq, 
Afghanistan, and even distant and geographically far away 
    The United States desires to fight ISIL. That is not the 
case with the Revolutionary Guards. From their perspective, it 
is fine that there is an enemy called the Islamic State. Which 
is not really threatening the existence of the Islamic Republic 
of Iran, and at the same time, is the only alternative to 
Bashar al-Assad and his dictatorial regime in Syria. This is 
why we see that the Iranian forces and unfortunately also the 
Russian forces in Syria, are not targeting the ISIL threats. 
They are targeting the secular opposition to Mr. Assad.
    We also see that these mechanisms are perpetuating the war 
in Syria. Because of the exact presence of the Revolutionary 
Guards in Syria, we see more and more Sunni radicals from all 
over the world travelling to Syria to fight the Shia threat, 
and to counter it, and this is, of course, something which is 
perpetuating the conflict and keeping ISIL, in its existence, 
it is prolonging the existence of ISIS.
    So some of the policies which I believe the United States 
could apply in order to counter those measures is first and 
foremost to attack those units of the Revolutionary Guards 
which were deployed to Syria by designations. Those groups of 
the Revolutionary Guards, they are engaged in support to Mr. 
Assad's regime. They are engaged in terrorist activities, and 
they should be designated as such. And also I believe that the 
United States should never accept demands of the Islamic 
Republic of Iran or others that Mr. Bashar al-Assad should be 
kept in power in Syria because that would only serve the 
interests of the Revolutionary Guards. And will perpetuate not 
only the war in Syria, but also the revolution, the permanent 
revolution which I mentioned in the beginning of this 
presentation. Thank you, Mr. Chairman.
    [The prepared statement of Mr. Alfoneh follows:]


    Mr. Modell. Chairman Royce, Ranking Member Engel, members 
of the committee, fellow panelists, good morning. Thank you for 
the opportunity to speak today.
    As the Middle East continues to burn, the U.S. and its 
allies have numerous reasons to believe that Iran really hasn't 
changed all that much since President Rouhani took office in 
September 2013. President Rouhani was elected to rescue Iran's 
economy. That was his mandate, and he is on his way to 
achieving that. Rouhani may appear moderate next to outspoken 
hardliners in the IRGC, but I believe that both continue to be 
driven by the same revolutionary ideals that inspired the 
Ayatollah Khomeini to create the Islamic Republic in 1979. 
Rouhani has been outspoken in his disagreement with some of the 
methods chosen by the IRGC, but there is little that he can do, 
as Mr. Alfoneh has said, to stop the IRGC.
    The recent unwillingness of the Obama administration to 
weaken the IRGC seems to me incompatible with its apparent 
belief that the JCPOA will strengthen moderates in Iran who 
favor internal reform and rapprochement with the West. I think 
it is worth it to look at some of the core missions of the 
IRGC, particularly it is Quds Force in the region, some of 
which are not regularly mentioned, others which were mentioned 
by the chairman and the ranking member.
    In addition to some of the lethal activities that were 
suggested and the more destabilizing military activities that 
the IRGC engages in, they are heavily involved in covert 
influence, grass roots foundation building across the region, 
via culture, socioeconomic, political, and business 
organizations, and in my testimony I have given a graphic of 
some of the ways in which they approach the whole of 
government, grass roots, bottom-up approach to building 
influence across countries, which is sectarian driven.
    The IRGC is also working very closely with Lebanese 
Hezbollah to build a global commercial apparatus that is 
designed to acquire new technologies, assist with covert action 
programs, create new sources of revenue, and actually add to 
Iran's existing threat facilitation networks. The importance of 
covert action to Iran's revolutionary export strategy has been 
clear from day one, particularly in the last 4 years.
    Since May 11, there have been dozens of terrorist plots 
attributed to Iran, from an attempt to murder the Saudi 
Ambassador in the U.S., to a foiled bomb plot in Kenya, covert 
action continues to remain a key tool of Iranian foreign 
    The Quds Force is engaged in various nonkinetic activities, 
as I said, and they will continue to play a role in its 
external resistance mission, whether it is front companies 
religious foundations, cultural centers, and so on.
    Some of the ways in which IRGC is destabilizing the region 
have already been mentioned. I would like to point out a couple 
of things that are given less attention I think, and that is 
the IRGC is part of a sectarian repopulation strategy across 
the region. Few people are talking about the IRGC's leading 
role in Iran's strategy to alter the sectarian balance across 
the region, beginning in the Levant. So when and where it can, 
Iran-sponsored militias are creating Shia support bases across 
Iraq and Syria and even getting to the point of pressuring 
Sunni's entire communities to relocate. It perpetuates Sunni 
distrust, hatred, and organized opposition to Iran, Iran-backed 
militias, and even Shiites.
    Bahrain is mentioned also. I think it is a particular 
problem. The propaganda war between Manama and Tehran continues 
to intensify as a result of persistent messaging on the part of 
Iranian hardliners that Bahrain actually belongs to Iran. The 
recent arrest of 36 Bahraini Shiites on charges of spying for 
the IRGC, the 400 or so others in prison on similar charges, 
and the dozens of incidents over the years, almost always lead 
back to the IRGC.
    In Saudi Arabia while President Rouhani and Foreign 
Minister Zarif have made some attempt at diplomatic outreach to 
the Saudis, the IRGC has been on a much more confrontational 
path, both openly and covertly. Saudi Government continues to 
uncover IRGC attempts to penetrate and militarize Shia 
communities in its oil-rich eastern province. The IRGC's 
Department 1000 operating out of Basrah continues to play a key 
role in these and other efforts against the Kingdom.
    I look forward to talking about some of my policy 
recommendations as well. Thank you for the opportunity.
    [The prepared statement of Mr. Modell follows:]

    Chairman Royce. Thank you. Ambassador.


    Ambassador Benjamin. Chairman Royce, Ranking Member Engel, 
distinguished members of the committee, thank you very much for 
the opportunity to speak today about Iran's Revolutionary Guard 
Corps, and more broadly, the country's destabilizing behavior 
in the Middle East. As a prefatory note though, I want to 
mention that the United States has over recent decades compiled 
a record of success in dealing with Iran. We have certainly had 
our losses, such as at Khobar Towers in Beirut in 1983, but 
overall our Nation has, together with our partners in the 
region and around the world, prevented the Islamic Republic 
from causing far greater damage to regional stability and the 
security of some of our closest friends.
    And today I am convinced that we are on a course to 
continue the success and, indeed, to strengthen security in the 
region through the JCPOA, which if Iran fulfills its 
obligations, will end the country's pursuit of a nuclear weapon 
for at least 15 years.
    As President Obama has said on many occasions, this deal 
does not address all of Iran's behavior, nor was it intended 
to, but it does address one of the foremost security challenges 
of our time, and that is Iran's nuclear aspirations. And as we 
consider the other ways in which Iran challenges us, we should 
be mindful of the JCPOA achievement and leery of anything that 
would undermine it, and we should also recognize that, the 
problems we face would be, without the JCPOA, far more 
problematic if we were facing off against a nuclear-armed Iran.
    The charge has been made that Iran is going to get a vast 
influx of cash with which to carry out terrorist attacks and 
subversion. We certainly have well-founded fears of Iranian 
plotting, and we must continue to show vigilance, but the 
argument I think needs to be examined in two ways. First, how 
likely is it that Iran will devote massive resources to such a 
course, and second, to what extent does the Islamic Republic's 
behavior, current behavior, represent a continuation of earlier 
conduct. It seems to me that the hypothesis is flawed in two 
ways--In several ways excuse me.
    First, the Iranian leadership's goal in negotiating the 
JCPOA was to improve economic conditions at home that were 
eroding support for the regime. So much seems clear from the 
rhetoric and the behavior of Iran's leaders. It would follow, 
therefore, that the bulk of the money will be used to 
ameliorate domestic concerns. According to press reports, the 
U.S. intelligence community has arrived at the same conclusion. 
And I would add here that Iran usually makes rational 
calculations about advancing its interests, and having invested 
the time, energy, and political capital in the JCPOA, it is 
undoubtedly aware that a new and enhanced campaign of terrorism 
or subversion would risk scuttling the agreement.
    Second, as has been mentioned before, the country has never 
restricted resources for its foreign policy, especially not for 
such activities as its direct support to the Assad regime and 
Iranian fighting in Syria. I think that suggests that it 
considers those areas to be well-funded. It is unlikely to 
spend vast new sums. It will certainly continue pouring money 
into those activities, but it is also important to remember 
that terrorism and subversion are inexpensive activities, and 
we have learned that through hard experience.
    Iran, of course, remains by significant margin the foremost 
state sponsor of terrorism, and we have seen no indication that 
there has been any change in the belief that terrorism is a 
legitimate instrument of policy. But what I would like to note 
is that, to pick up on what Mr. Modell was saying, you know, 
the sectarian dimension of all this requires an awful lot of 
attention, and I would suggest that the situation that we 
confront today is far different from one that we have seen in 
the past. And I think it is one we really need to examine 
closely. Whether we are talking about what is going on in 
Yemen, in Bahrain, in Syria, these reflect dynamics in the 
region that have changed dramatically.
    And it is important to recognize also that the trigger for 
sharpening in revival of sectarian tensions was our invasion of 
Iraq, which destroyed the region's fragile equilibrium and 
upended the regional politics. And the second trigger was the 
Arab Spring, which opened up a new opportunity in Syria for 
Sunnis to even the score having lost the capital in Baghdad.
    There is a lot more to say, but I want to just close my 
remarks by saying that I don't think there is any expectation 
that Iran is going to be a good global citizen, but I think 
that the United States is well postured to deter and to prevent 
increased subversive and terrorist actions through a raft of 
different sanctions regimes, both as well as U.N. Security 
Council resolutions that enable all kinds of actions to 
constrain Iran, and I think that we are in a good position to 
manage the problems that we face. Thank you very much.
    [The prepared statement of Ambassador Benjamin follows:]

    Chairman Royce. Let me go to a question that I think 
impacted all of us back in October. October 15 you had the 
missile launch, the most advanced missile yet in the IRGC's 
inventory, and 2 months later there has still been no action in 
the wake of that test, which I think clearly violated United 
Nations Security Council Resolution 2331.
    So Mr. Modell, if I could ask you here, about next steps, 
because given that the EU sanctions are going to be lifted 
against the traditional home of their ballistic missile 
programs, which is the IRGC Air Force at their Ghadar missile 
command, what are the chances that the administration will 
actually implement sanctions against Iran for this advancement 
in its ballistic missile program?
    Mr. Modell. I don't see any indications that there is a 
good chance that the Obama administration is going to take any 
punitive actions with regard to this ballistic missile launch. 
It was clearly in violation of U.N. Security Council Resolution 
1929 and the updated resolution as you said. I think it is 
worth pointing out that the IRGC's aerospace force has not 
gotten a lot of attention when you look at the IRGC's role in 
externalizing this revolution throughout the region. And if you 
look at the development of Iran's missiles, it has been a key 
part of their conventional military buildup over the last 20 
years, particularly since the end of the Iran-Iraq war. They 
believe it goes hand in hand with their idea of self-
sufficiency in promoting the revolution.
    And I think when you look at the pace at which they are 
developing new missiles, the pace at which they are trying to 
use precision-guided technology, not only in the missiles that 
you mentioned that are going into the hands of Hezbollah and 
Palestinians, it could be used against Israel but throughout 
the region, I think it is something that needs to be addressed. 
And I----
    Chairman Royce. Let me change directions then, because 
obviously with the IRGC being the most probable economic actor 
in the equation there in the government in Iran, what is the 
risk of any company looking at reentering the Iranian market, 
from major Asian firms in Japan or in South Korea with U.S. 
exposure to small companies in eastern Germany? What is the 
risk of doing business with the IRGC?
    Mr. Modell. One of the things I would say, I am glad it was 
mentioned that companies going back, particularly the European 
companies going back into Iran, should be well advised to look 
at the fact that the IRGC is not going away, and the IRGC has 
deeply penetrated every corner of every industry in Iran for 
the most part.
    And I think that one of the things that needs to be talked 
more about is the fact that IRGC-linked companies and 
businesses have already started the process of hiding their 
IRGC links in anticipation of trying to get into business deals 
with European companies and Asian companies and others who are 
going to be reentering Iran. There is a process underway, among 
IRGC individuals and entities, that are sanctioned, to ensconce 
themselves in companies that are clean, in business deals that 
are clean, so that means erasing old contracts, erasing records 
and business registries, and different things. So I think it is 
a very dangerous proposition for any company going back into 
Iran not knowing exactly who they are going to be dealing with.
    The other issue, Mr. Chairman, that I would mention is over 
the last decade, you have seen a terrible problem in the growth 
of corruption in Iran. So if you believe that the Foreign 
Corrupt Practices Act should be any deterrent for companies 
going back in, again, Oil Minister Zanganeh 2 days ago, at the 
launch of a global meeting, to talk about the reemergence of 
the Iran's oil and gas industry, had to go out of his way to 
say any companies doing business with Iran who are asked to pay 
bribes, those contracts will be null and void. He had to go out 
of his way because it is a tremendous problem, and the IRGC is 
at the heart of that problem.
    So, what I would advise companies going back into Iran, one 
thing, what has emerged is there are a number of data analytic 
firms here in DC and elsewhere that are specializing in due 
diligence, so the idea of enhanced, know-your-customer measures 
that will need to be taken for anybody going back into Iran 
will require outside support.
    Chairman Royce. Let me ask Mr. Alfoneh the last question 
here, and that goes to the two goals that you talked about in 
your testimony that they are seeking in Iran.
    First, they are working to keep Bashar al-Assad in power by 
coordinating Shi'ite militias to maintain control over western 
Syria. By the way, I would add to that something that Mr. 
Modell mentioned in his testimony, but I have been briefed on 
the fact that they are even bringing in militia from Hezbollah 
and their families into Sunni-dominated neighborhoods in 
Damascus and running the Sunni population out as they basically 
do an ethnic cleansing campaign. But that is part of it.
    And secondarily, you said they are combatting secular 
opposition in Syria while maintaining ISIS is a worse 
alternative to al-Assad. Can you explain how the IRGC is 
accomplishing that dual mission?
    Mr. Alfoneh. Yes, Mr. Chairman. If we look at the combat 
fatalities of the Revolutionary Guards in Syria, we see that 
the place of death is usually the places which have been bombed 
by the Russian Air Force, so in other words, the Revolutionary 
Guard is in practice acting at the infantry force, the ground 
force, of Russia. And we also know from U.S. Government sources 
that Russia is not bombing the Islamic State. Russia is bombing 
the secular opposition to Bashar al-Assad's regime, and then 
after Russia has bombed those specific areas, we see an influx 
of Revolutionary Guards members going into those areas, and 
also the place of death is reported in those exact areas. So 
unfortunately, this is a very, very cynical strategy that the 
Assad regime and the Revolutionary Guards are pursuing in 
    Concerning your comment about the role of the Revolutionary 
Guards and the economy, Mr. Modell is absolutely right. If you 
look at the assets of the Revolutionary Guards on Tehran's 
stock exchange, it is more than $17 billion worth of companies 
registered on Tehran's stock exchange that the Revolutionary 
Guard has purchased during the time that the government of 
President Ahmadinejad was privatizing these companies. So the 
Revolutionary Guards' claims that its front companies are 
private sector actors and they do not belong to the public 
sector. This is why they were allowed to bid for ownership of 
those companies, and they acquired, they purchased those 
companies on Tehran's stock exchange.
    Just to mention one example, Iran Telecommunication, which 
is the largest phone company in Iran, was purchased by the 
Revolutionary Guards in 2009 for $7 billion. Back then in 2009, 
the military budget of the Revolutionary Guards on an annual 
basis was only $5 billion, but they could pay for the company, 
the phone company, $7 billion cash because of all the other 
economic activities that they have.
    Chairman Royce. I assume that makes it easier for the IRGC 
to monitor citizens' communications as well. We will go to Mr. 
    Mr. Engel. Thank you. Thank you very much, and thank you 
for your excellent testimony. Ambassador Benjamin, I agree with 
you when you said that the invasion of Iraq really changed, 
upset the apple cart, and really in hindsight, we eliminated 
Iran's major adversary. Therefore, we helped unfortunately to 
make Iran the hegemony power in the region, and I think that is 
very, very true. But I couldn't disagree with you more when you 
say that the fact that Iran has been the leading state sponsor 
of terrorism when they had no money doesn't necessarily mean 
that now that they have money, they will continue or increase 
their terrorist activities. I think that logic says that if the 
goal of the Iranian regime, the Revolutionary Guards and the 
entire regime, is to sponsor terrorism to destabilize the 
region, now that they have money and it is not going to be a 
sacrifice, they are going to use it for terrorism.
    When the Rial, their currency was in the toilet, when their 
people clamored for more freedoms or more things that they 
needed, Iran, the government, the regime didn't care. The 
regime made sure, though, that groups like Hezbollah and even 
Hamas, which of course is the other side of the Sunni-Shia 
spectrum, had enough money. So now that Iran has money and it 
is not going to be so painful, I think that it is very easy to 
imagine, and it is not imagination, that they will have more 
money to support more terrorism.
    And finally, you had mentioned the Security Council 
resolutions. I don't think that Iran cares about Security 
Council resolutions. They had a resolution had been passed at a 
Security Council which demanded, I think there were six or 
seven or five resolutions that Iran stop spinning centrifuges, 
that Iran stop spinning. And one of the problems I had with the 
negotiations with Iran is that we didn't make a precondition of 
our sitting down with them and talking with them that they stop 
spinning. And once we didn't demand that as a prerequisite to 
sit down with them, you knew that in the conclusion of any 
agreement we had with them, the demand that they stop spinning, 
as the Security Council resolution said, would not be a final 
decision in any kind of agreement. So I think we essentially 
ceded that.
    I just want to mention this because Members here are very 
thoughtful, and some voted no, and some voted yes. I voted no. 
I respect every Member's thoughtfulness. But I think that what 
really bothers me is I think that we have almost stamped the 
fact that the Iranian regime is going to be there for a long 
time to come. We have helped them. We have given them all kinds 
of relief, and any hope we had of regime change so the Iranian 
people could live in a democracy I think, went out the window 
because frankly regimes that have lots of money are able to use 
    So I just wanted to point that out, and if you care to 
answer, I would be grateful.
    Ambassador Benjamin. Mr. Engel, you have put a lot of 
issues on the table. Let me just try to answer a few of them 
quickly. You mentioned your skepticism about Security Council 
resolutions. Well, the issue is not what Iran thinks of them. 
It is that they empower the international community to take 
certain actions. And so for example, at the end of September, a 
weapons system from Iran to Yemen was seized on the high seas 
under the provisions of the relevant Security Council 
resolution. So the point is we can have an effect, a real 
material, concrete effect on Iran's ability to play the kind of 
role that everyone here deplores because of those instruments.
    You mentioned the money issue. So I think that there is a 
few things to say. One is that there is basically an absorption 
issue. There is just not that many different things to spend 
the money on. They have been spending lots of money on these 
activities for a long time. They will pour more in. I expect to 
see that more resources will make their way in particular to 
Syria. And by the way, although we all deplore what is going on 
in Syria, I think it is important to remember that Iran's 
policy there is fundamentally a conservative one. They are 
trying to preserve the status quo. Trying to preserve their one 
important ally in the international community. And----
    Mr. Engel. I might say----
    Ambassador Benjamin. I am sorry?
    Mr. Engel. I might say they are trying to preserve it, and 
in trying to preserve it, they are using the terrorist group 
Hezbollah to do the fighting and to guarantee that they can 
preserve it, so that is another element of support for----
    Ambassador Benjamin. Without a doubt, and they have been 
funding Hezbollah for many, many years, and I don't dispute 
that in any way. I am just saying that, first of all, one of 
the main constraints has been manpower and not money, and, you 
know, you don't need $50 billion to fund your terrorism or 
subversive activities.
    I do find it hard to imagine why Iran would make a quantum 
leap in its provocative behavior if that would throw into doubt 
the future of the agreement that they worked so hard to get. I 
think that the Iranian leadership definitely saw that their 
position was eroding as a result of public discontent. And so I 
think that those resources will primarily, although not 
exclusively, go to ameliorate social conditions and to restart 
the economy.
    I would just also point out, because several people have 
mentioned Hamas, that Hamas has been essentially cut off by 
Iran because Hamas refused to support Iran's policy toward 
Syria. And I think that this is an absolutely perfect 
illustration of how the sectarian upheaval in the region has 
changed the rules of the game. And we should remember that King 
Salman, the new king of Saudi Arabia, didn't find time to come 
to the United States for a meeting at Camp David with President 
Obama, but he did have time to entertain a Hamas delegation in 
the hope of bringing Hamas under the Saudi wing. So things are 
in dramatic flux, and I think we need to think very hard and 
fast about what America's role is in the context of this 
sectarian conflict.
    Finally, just on the issue of IRGC benefits from the deal, 
you know, it has gone unmentioned that there is still a raft of 
U.S. unilateral sanctions on IRGC, Treasury sanctions, which if 
we want can have secondary effects and which are levied against 
IRGC for terrorism, for proliferation, for human rights 
violations, and the like. And I do believe that actually 
companies around the world recognize that we have these 
sanctions, that we may reassert them in a stronger sense, that 
is in a secondary sense, and therefore they are going to be 
cautious about getting involved with IRGC-dominated entities. 
Thank you.
    Mr. Engel. I just want to ask one quick question to anybody 
who would care to answer. We have seen some recent reports that 
have been unconfirmed that the head of the Quds Force, 
Soleimani, was severely injured in Syria. Have any of you heard 
that? Have you had any confirmation or lack of?
    Mr. Alfoneh. Sir, we only have heard the rumors, but he 
seems to be alive, and of course the Islamic Republic 
propaganda machinery is trying constantly to communicate the 
message that Major General Soleimani is still alive, so there 
is no news of the contrary and certainly not proof.
    Mr. Engel. Thank you. Thank, Mr. Chairman.
    Chairman Royce. So we go to Ileana Ros-Lehtinen of Florida.
    Ms. Ros-Lehtinen. Thank you so much. Excellent hearing, Mr. 
Chairman and ranking member. As we have heard, and I agree with 
the chairman and the ranking member that the administration 
downplays concerns that Iran will use the sanctions relief it 
gets from the nuclear deal for its terror activities, instead 
of arguing that the money will be used to shore up a failing 
Iranian economy. But as we have heard, the IRGC is one of the 
major actors in the Iranian economy with a presence in nearly 
every sector.
    It has a particularly large presence in the same sectors 
that the administration is arguing that sanctions relief will 
go to: Construction, infrastructure, energy, finance. The 
administration is telling only one small part of the story and 
that we have only scratched the surface of what we should be 
sanctioning, including designating the IRGC and the Quds Force 
as foreign terrorist organizations.
    And, Mr. Alfoneh, in your written testimony, you mention 
your colleague Dr. Ottolenghi, who testified at our Middle East 
subcommittee on this IRGC issue 2 months ago, and you both 
argue that the administration should be reporting on the IRGC 
in much greater detail, including the subsidiaries of IRGC 
parent companies, the companies that have an IRGC controlling 
interest, and the exact nature of the IRGC support to Assad. 
How effective can our remaining sanctions be if we are not 
targeting the IRGC subsidiaries and commercial interests?
    And for Mr. Modell, you highlighted the nonkinetic 
activities of the Quds Force, including its work in setting up 
religious organizations, foundations, cultural centers, and 
testified that progress on U.S. efforts to counter this 
irregular warfare has been very limited. And as Mr. Duncan 
continually points out, we have seen a lot of Iranian activity 
in the Western Hemisphere throughout the Middle East to set up 
these types of influence, destabilization, recruitment centers, 
but very little effort by us in the United States to counter 
    What is Iran's strategic goal in all of this, and where has 
it been more active, and why have our efforts to counter 
Iranian influence in this arena been so ineffective? Mr. 
    Mr. Alfoneh. Thank you. This is a very, very important 
point that you are raising, madam. The Revolutionary Guard, of 
course, is trying to hide its assets. There are so many front 
companies that the Revolutionary Guard is constantly creating, 
and, therefore, the Treasury here in the U.S. must, of course, 
also be extremely vigilant and be careful that they do not 
create companies that we are unaware of.
    One of the good allies of the U.S. in this cat-and-mouse 
game of course is what remains of the private sector in Iran 
because they certainly do believe that the Revolutionary Guard 
is trying to make their business impossible in Iran. And they 
also would be willing to cooperate identifying some of those 
companies of the Revolutionary Guards which is constantly 
popping up.
    And as you also pointed out, many of these activities are 
going to, you know, the money that flows into Iran goes back to 
the Revolutionary Guards because of their activities, 
particularly in the construction sector. Khatam al-Anbia 
construction headquarters of the Revolutionary Guards is the 
largest contractor in the entire Islamic Republic of Iran. Most 
of the public projects, development projects, in Iran, are 
handed over to the Khatam al-Anbia construction base on no-bid 
basis. So the private sector has no say. If they do participate 
in those projects, it is as subcontractors to the Revolutionary 
    Ms. Ros-Lehtinen. Thank you, and I am going to interrupt 
you here to give a minute to Mr. Modell.
    Mr. Modell. Thank you for your question. One of the things 
is, when you think about the way that Iran externalizes 
revolution, when you think about when Iran goes into a place 
like Iraq or Syria or Yemen or anywhere else, there is a lot of 
building from the ground up. So when I mentioned religious 
centers, mosques, cultural centers, and so forth, I think that 
that is a firm belief that, like Mr. Alfoneh suggested, it is 
more than just about terrorism and subversion. It is about 
actually altering the fabric of the places where they want to 
have control and influence in.
    So when they go and do this, it requires a lot of money. 
So, you know, when you think about the money that it takes to 
do this, one thing I would mention is a lot of people are 
speculating as to whether or not the Iranian Government is 
going to take this windfall that it is going to get from 
sanctions relief and direct it into the IRGC or the MOIS and 
other security elements of the government. I think, and Mr. 
Alfoneh might be among them, people have written about the fact 
that after the negotiations began in 2014, the IRGC budget went 
up. The Ministry of Intelligence budget went up, and this was 
just in anticipation of sanctions relief. This was publicly 
stated. This was publicly declared.
    So I think if you are asking yourself how the Iranians are 
going to spend the money, they have already been very clear in 
indicating it. But again it is not--and I agree with Ambassador 
Benjamin that it is cheap to pull off a terrorist attack or to 
do subterfuge, but we are talking about something that is much 
more transformational than that.
    Ms. Ros-Lehtinen. Thank you very much. Thank you, Mr. 
    Chairman Royce. Thank you, Ileana. Mr. Brad Sherman of 
    Mr. Sherman. Thank you. Terrorism may be cheap. War is 
expensive. One of the things that happened, just as soon as it 
was clear to those observing Congress that this deal would go 
through, and Iran would get its hands on $130 billion is Russia 
deployed sources to Syria. There was like a day between when I 
concluded--and I watch Congress--that this deal would be 
implemented and when Russia began its planning and deployment. 
I won't ask you gentlemen whether there is any proof that Iran 
is paying some or all of Russia's costs because my guess is 
that the Iranians don't share that information with you.
    Ambassador Benjamin when you say that we are on course to 
continue our success, you may be out of step with what 
Americans are seeing and feeling about the Middle East. Mr. 
Alfoneh, you say that Iran is moving from a theocracy to a 
military dictatorship. In a real short answer, can you tell me: 
Is the next generation going to be run by clerics who are true 
scholars of Islam based in Qom, or are guys with guns going to 
select the next grand Ayatollah?
    Mr. Alfoneh. Thank you for the fantastic question, sir. 
About the next generation of rulers in Iran, I think that 
Ayatollah Khomeini, the Supreme Leader of Iran, has committed 
the worst mistake any civilian politician can make, and it is 
that he is systematically using the Revolutionary Guards to 
suppress his domestic opposition. And of course what happens is 
that when you invite a military organization to participate and 
intervene in domestic politics, you cannot throw them out again 
because they have guns and you are a civilian and do not have.
    Mr. Sherman. Got you. I do want to agree with some that 
have pointed out the dangers of the Quds Force and the Iranian 
regime in general. The Shi'ite alliance has killed hundreds of 
thousands of innocent people in Syria and killed far more 
Americans in Iraq, Afghanistan, and the Marines in Beirut, than 
ISIS has ever aspired to. The difference is that ISIS when they 
kill 50 people, put it on YouTube. When Iranian-paid-for barrel 
bombs kill 1,000 villagers in Syria, Assad has the good taste 
to deny it. And for that reason, we tend to be focusing on ISIS 
as the most dangerous enemy.
    The question, I think it was Lenin asked, is what is to be 
done? You have convinced us that the Guard Force is a bad 
organization. We still have sanctions that are allowed under 
the nuclear agreement, tough sanctions on banks that conduct 
business on behalf of companies designated as a proliferator of 
WMD, which includes the IRGC, the Quds Force, many others. And 
what is often not mentioned in Section 302 that remains in 
force that provides for sanctions of those who engage in any 
significant activity with an IRGC entity.
    One problem is that we are not applying this to the 
National Iranian Oil Company, which I think you would agree is 
heavily involved with the IRGC. I am going to be distributing 
to all members of the committee a discussion draft of a statute 
aimed at the IRGC, and we now have a menu of sanctions that can 
be imposed against a bank or a company that does business with 
the IRGC. It shouldn't be a menu where maybe they just get some 
parsley, but rather an absolute ban on doing business in the 
United States which then can be lifted with specific licenses. 
So that a company that does any significant business with the 
IRGC would feel that it is going to lose all access to the U.S. 
market in doing business in the United States, and then it 
would have to go ask the administration for a license to go do 
this or that.
    And, second, in order to avoid neglect of the statute, it 
would have the GAO give Congress a list of those organizations 
that appear or are most likely to be doing business with the 
IRGC or its front groups, and those companies would be 
sanctioned unless the President within 6 months came to 
Congress and said, well, we shouldn't sanction this one and we 
shouldn't sanction that one. So if the administration did what 
the last three administrations have done, and just ignore 
Iran's sanctions, those sanctions would go into effect.
    So I look forward to working with the chairman and all the 
members and the ranking member on this discussion draft, and I 
also want to distribute it to our witnesses and ask you to 
comment on it for the record. I yield back.
    Chairman Royce. And I want to thank Congressman Brad 
Sherman for that draft. We will circulate it to all the members 
of the committee. We go now to Congressman Dana Rohrabacher of 
    Mr. Rohrabacher. Thank you very much, Mr. Chairman. This 
hearing sort of cements my view that we are entering into a new 
historic era, and the cold war is over, and now I think the 
post-cold war is coming to a close, and I don't know what we 
are going to call this new era that we are in. Perhaps history 
will record it as the era of Islamic terrorism or Islamic 
resurgence, depending on how we see what unfolds in the next 
few years. But we are in a different world than we were 10 and 
20 and 30 years ago.
    And I want to thank Chairman Royce. I want to thank Ranking 
Member Engel. We are facing a whole new era, and they are 
providing leadership so that we can understand the challenges 
that we face in this new era, and they both in sort of a 
bipartisan spirit and a spirit of getting to the facts, and I 
appreciate their leadership.
    Let me ask some specific questions, then about--knowledge 
questions. How many members does the IRGC have? What are we 
talking about in Iran? Talking about 50,000 people? What are we 
talking about there?
    Mr. Alfoneh. Sir, estimates are between 120 and 150,000 
active members, active duty members of the Revolutionary----
    Mr. Rohrabacher. Are they armed or are just others--anybody 
who is in a business owned by them or are we talking about the 
armed people?
    Mr. Alfoneh. These are the armed people, sir, in uniform.
    Mr. Rohrabacher. Okay. What is the regular army in Iran, 
and what is its size and how does it interact with this IRGC?
    Mr. Alfoneh. The regular military is sightly larger, but 
its bases are alongside the international boarders of Iran. And 
that is because of the constitution of Iran which gives a 
different mission to the regular military. The regular military 
has the mission of protecting the territorial integrity of the 
Islamic Republic of Iran. The mission of the Revolutionary 
Guards, according to the constitution, is to protect the 
revolution and its achievements in the abstract.
    Mr. Rohrabacher. Does the regular army get along with that? 
Is there any friction points there?
    Mr. Alfoneh. There are many ideological political 
commissars, in the regular military, which is, you know, a 
classical military organization. It is not ideological.
    Mr. Rohrabacher. Which would then be friction--cause 
friction between the two.
    In the IRGC, what ethnic makeup is that? We know in Iran 
about half the people are not Persian, but is the IRGC 
basically a Persian group, or do they have Kurdish people in it 
or Azeris, or Baluchs or Azeris or whoever? What is the makeup 
    Mr. Alfoneh. Yes, sir. We do believe that it actually 
reflects the ethnic composition of Iran as a whole.
    Mr. Rohrabacher. So there are Kurds who are----
    Mr. Alfoneh.--yes, sir.
    Mr. Rohrabacher [continuing]. Members of that as well as--
    Mr. Alfoneh. Shiite Kurds, yes.
    Mr. Rohrabacher. Okay. Now, in terms of the support of the 
IRGC for terrorism around the world, how many missiles, for 
example, we have all seen these rockets that go off and are 
shot by--out of the Gaza Strip into Israel, and I consider that 
to be a terrorist act. Anytime you shoot rockets into a 
country, especially if it is indiscriminately to try to just 
murder people, I would say that is terrorism.
    How many of these terrorist rockets that are going into 
Israel from the Gaza Strip and elsewhere, were either 
manufactured or paid for by the IRGC?
    Mr. Modell. Thank you for the question. I think the vast 
majority if not all of them. And not only that, the next 
generation is actually providing them with the ability to 
manufacture them themselves.
    Mr. Rohrabacher. I didn't catch that last part.
    Mr. Modell. I would say the vast majority have been 
provided to them by Iran. They are linked to Iran, Iranian 
manufacturers, but what Iran's next phase of support in 
providing missiles to groups operating in the West Bank and in 
southern Lebanon is to actually give them the capacity to 
develop those missiles themselves.
    Mr. Rohrabacher. I see. And we might note Congressman Engel 
and myself, and Ed--I am not sure if Ed was with us on that 
trip or not, but I remember when we crawled in--you were with 
us, when we crawled into these tunnels that were dug. And that 
was--they were not just crawl spaces. These were very expensive 
construction projects. Are those things being paid for by the 
    Mr. Modell. You know, from years ago I can tell you that 
the intelligence community I think was divided on that 
question. But I think the Iranians were working very closely 
with Lebanese Hezbollah in developing those, those tunnels. But 
as far as financing goes----
    Mr. Rohrabacher. These terrorists, whether they are people 
who are Palestinians who are conducting terrorism on Israel or 
these other, they don't have really a large source of money and 
what we are talking about when we say financing. This is a 
vital component to the existence of these terrorists.
    One last note, Mr. Chairman, and I know my time is running 
out, is that we have a similar situation from what you 
described in China, where you have the People's Liberation Army 
controls and actually receives the profit from a large number 
of commercial operations. And if people are investing in that 
and those companies are making a profit, it is going to the 
People's Liberation Army and not to the people of China. So go 
    Mr. Modell. I would just like to make one comment on that. 
I think you raise a very important point. And if you go back in 
time to the origin of Lebanese Hezbollah when Iran was--in the 
early 1980s when Iran was instrumental in figuring out what is 
the grand vision going to be for this organization, what is 
their mission going to be, one of the things that took years 
and years for them to develop was a global commercial apparatus 
that was composed of businesses, that was composed of a lot of 
things you just mentioned, that actually create independent 
streams of revenue that they are off the books. And Iran is 
doing it. Hezbollah is doing it. And Hezbollah's dependence on 
Iranian official funds over the years has gone down for that 
    Mr. Rohrabacher. Thank you.
    Chairman Royce. Yes. You raised the point, Mr. Rohrabacher, 
on those tunnels and who paid for their construction. I would 
just make the point, myself, and Mr. Engel, and Mr. 
Rohrabacher, and Mr. Gregory Meeks, were in those tunnels 
shortly after the Gaza operation. And it was reminiscent to me, 
in 2006, the Iranian constructed tunnels done for Hezbollah, 
their engineers were involved in that. We know that from ID 
badges that were picked up after the 2006 second Lebanon War. I 
was there during that conflict. And in this particular case, 
not only do you have indication that Iran was involved in also 
the tunnels under Gaza, this particular tunnel that we were in, 
came up underneath a village. And the plan apparently was to 
capture students, because it was a school. It was an elementary 
school that it was under. And to pull them back into Gaza so 
that the IDF would have to fight house by house.
    But the most important point is that after the conflict was 
over, the report surfaced which was in the Wall Street Journal, 
as I recall, in which Iran committed to rebuilding those 
tunnels that were closed, some 30 plus were discovered, for 
Hamas. Now, we understand Iran also supports, you know, the 
Palestinian Islamic jihad. In other words, they are not just 
supporting Hamas in Gaza. They have a secondary organization 
that they would prefer. But they are providing Hamas. The story 
also mentioned they committed to providing again to resupply 
the rockets to Hamas.
    So, you know, it is an on-again/off-again depending on 
geopolitics in the area in terms of how much support they 
provide Hamas. They clearly would prefer Islamic jihad as an 
organization, but I think it is unquestionable that they have 
been involved in this enterprise. And, indeed, those reports 
regularly appear in the media. So I would just, Ambassador, 
point that out for posterity.
    Ambassador Benjamin. If I may, Chairman Royce, historically 
there is no question that Iran was a principal sponsor of 
Hamas, and I believe the exclusive sponsor of Hezbollah. 
However, I believe the best information we have today is that 
Iran is not transferring any resources to Hamas now. And Hamas' 
budget is dependent entirely on its international fundraising 
    And that includes money that it receives from Qatar and 
from Turkey, that is to say, from the Sunni side of the 
equation. And it doesn't appear likely after repeated meetings 
between Hamas and Saudi Arabia that Iran is going to forgive 
Hamas, what it views as treasonous activities. So I think it is 
important that these distinctions be recognized.
    Chairman Royce. Well, thank you. Hopefully they don't 
follow through on their commitment to rebuild those tunnels.
    We will go, then, to Albio Sires from New Jersey who is 
next in the queue.
    Mr. Sires. Thank you, Mr. Chairman. And thank you for being 
here today.
    You know, I have been to a number of hearings, and every 
time I sit here and sooner or later the comment is made that 
the Supreme Leader is losing support from the Iranian people.
    I was just wondering, after the nuclear deal, have the 
Iranian people lost hope that there could be a change, or has 
the Supreme Leader solidified his position, and have the 
Revolutionary Guards solidified their positions now that they 
have a deal, and they are going to get all this money? Sir?
    Mr. Alfoneh. Sir, it is an important point that you are 
making and a good question. I am not sure if I know the answer, 
but I will try my best. Mr. Khomeini needed someone, a 
technocratic type, like Mr. Rouhani to get people to vote for 
the regime in order to secure some degree of legitimacy for 
this regime. And the only reason Mr. Rouhani was elected as 
President of the Republic was because that he promised the 
Iranian public a nuclear deal with the U.S. This is why the 
Iranian people elected him.
    However, now that he is elected and now that the nuclear 
deal is made, Mr. Khomeini no longer needs Mr. Rouhani. He no 
longer needs the technocratic elites of Iran. So I think the 
best test is going to be the parliamentary elections of 
February. Is Mr. Khomeini going to allow Mr. Rouhani and his 
technocratic elites of Iran to be elected into the Parliament, 
for example? Or is he systematically going to filter every 
single supporter of Mr. Rouhani among those candidates? And if 
he does that, and I strongly suspect it is going to happen, 
then we will see the rise of the Revolutionary Guards and a 
reaction among the Iranian public which is one of hopelessness.
    So in one sense, yes. The Iranian public has lost faith 
twice; once during the Green Revolution of 2009 when 
unfortunately the administration extended a hand of friendship 
to the regime, to Mr. Khomeini and not to the Iranian public, 
and second time when a nuclear deal was made where the greatest 
beneficiary is the Revolutionary Guards and not the Iranian 
    Mr. Modell. Thanks for your question. The only thing I 
would add to that is I think that there is somewhat of a 
misconception when you talk about Khomeini as being an all 
powerful figure in Iran. I think there is--to a certain degree 
he is weak in the sense that he is constantly forced to balance 
conflicting factions of a very, very--in fact, much more 
developed series of political factions than when he took over 
in 1989. You have a much more mature playing field that he has 
to balance. And he needs the IRGC just as much as the IRGC 
needs him.
    So, you know, if Iranians ask themselves was the election 
of Rouhani and the JCPOA, do those give us hope or not, I think 
the Iranians are hopeful. If you look at polls, Iran is 
hopeful. But they don't equate it to a simple will Khomeini 
allow us to continue to have freedoms and advance or not. The 
Iranians recognize the complexity that Khomeini has to balance, 
and it is not an easy thing to do. And like Mr. Alfoneh pointed 
out, I think next February is going to be very critical in 
seeing just how much the IRGC has done to actually push back 
and ensure that, you know, if there is any momentum toward 
Rouhani, it slows down.
    Mr. Sires. Ambassador?
    Ambassador Benjamin. Both of my colleagues have made very 
insightful remarks. I would just add that if there is one tried 
and true pattern in history, it is that the frustration of 
rising expectations is profoundly dangerous for rulers. And 
expectations have been raised dramatically in Iran. Rouhani is 
extremely popular. The notion that Iran is going to have an 
opening to the West, that the Iranian economy will get a new 
rush of oxygen, and that they will see greater prosperity I 
think is now quite clear. And so I think that the Supreme 
Leader, you know, has to walk a fine line if he wants to 
maintain his own standing while not disappointing the 
expectations of the Iranian people.
    This brings me back to something actually that Mr. Engel 
said before about regime change. I think that we found over the 
last 30-plus years that regime change anywhere in the world is 
a perilous course of action. And I think that the virtues of 
the JCPOA have largely been underestimated in terms of creating 
a 15-year period, which is a significant period of time, in 
which those expectations can arise, flourish, and shape the 
course of the Iranian future. To be sure, we have to be 
vigilant about bad behavior, but I think this is no small 
    And we can't say for certain that in 15 years Iran will be 
a more hopeful place, but we, I think, can say with some 
certainty that without it we would be facing a very dire 
situation. And now we have given the Iranian people, you know, 
some reason to, shall we say, vote with their feet.
    Mr. Sires. Thank you very much. My time is up.
    Chairman Royce. Mr. Matt Salmon.
    Mr. Salmon. Thank you. In your view, and this question is 
to all panel members, is the administration's growing 
diplomatic outreach to Iran, and some might say acquiescence, 
particularly considering Iran's support for strife in the 
region, undermining U.S. credibility in the region? Start with 
you, Ambassador.
    Ambassador Benjamin. Well, I think it is an interesting and 
important question. There is no question--there is no doubt 
that among our Sunni allies our, Sunni partners, there is 
significant doubt about this, and they are committed to a 
policy, by and large, of not talking to Iran although they do 
themselves, and of doing everything they can to beat back what 
they see as the Shia tide. Having said that, it is not entirely 
clear to me that their perception of what is going on is 
    You know, the Sunnis are also culpable, it seems to me, 
particularly the Gulf Sunnis, for the humanitarian catastrophe 
that is Syria, because they have been pouring more and more 
resources in at every juncture to try to topple the Assad 
regime. And there has been very little desire to find an off 
ramp there. Similarly, although the, you know, the 
Yemenconflict is extremely complicated, what has I think been 
lost sight of is that one of the critical changes was that 
longtime strongman Ali Abdullah Saleh, which sides essentially, 
and tried to relitigate what happened in the Arab Spring and 
the election of--or the installation of President Hadi, and so 
this has been seen as another bit of Iranian perfidy. It is 
true that we don't like what they are doing with the Houthis, 
but this has also led, you know, to a campaign against, you 
know, an outside war against Yemen that has caused another 
humanitarian catastrophe.
    So I think that the situations is very complicated. I 
think, you know, the Israeli Government's view was quite clear. 
But having said that, it is impressive how much of the Israeli 
defense establishment, I think, has come around to approve of 
the JCPOA and has been encouraged by the direction things are 
    Mr. Salmon. Thank you. I am going to shift gears because I 
have a couple of other questions. I did want to get that one 
out there. But I have a question for you, Mr. Alfoneh, and then 
one for you as well, Mr. Modell, if I can just throw them both 
    First to you, you recommend that the U.S. should still 
pursue the dual goal of toppling Assad regime and fight ISIS at 
the same time. Even if we are able to topple the Assad regime, 
which will be increasingly difficult with the overt support of 
Assad by Russia and the covert support by Iran, what next? And 
wouldn't the most likely outcome be an Iranian or Russian 
puppet or a controlled puppet regime? Or perhaps even worse a 
fractured lawless Syria that will give ISIS a larger power base 
and more territory to control? Is this really the policy that 
is going to bring stability to the region?
    And my add-on question to you, Mr. Modell, is very similar. 
Do you think Iran or ISIS poses the bigger threat to national 
security, our national security, both in the short and the long 
term? I would like your thoughts on that.
    Mr. Alfoneh. Sir, I do believe that one of the reasons that 
the Alawite elites in Syria are backing Bashar al-Assad is that 
they have absolutely no alternative as things are right now. If 
they are given an alternative, if there are security guarantees 
that there is not going to be genocide of Alawites after the 
Sunnis also take part in government. And if a government like 
the United States is willing to give that type of guarantees to 
the Alawites, why should they stick with someone who has led to 
destruction of their own countries? I do believe that there is 
dissatisfaction even among Alawite elites in Syria, but they 
have honestly nowhere else to go.
    Mr. Salmon. Mr. Modell.
    Mr. Modell. As to your question as to what presents a 
greater short- or long-term risk to U.S. national security 
between Iran and ISIS, you know, I guess it depends. I mean, 
you know, if you are talking about lone wolf terrorist attacks 
in the United States or, you know, bombings like 9/11 or the 
Paris attacks, obviously ISIS. But at the same time, I think if 
you look at the heart of what Iran is doing, okay, the 
ideologically driven externalization of its Islamic revolution 
and everything that represents, if you believe the vast 
majority of our allies, our current allies at least, in the 
Gulf and elsewhere, are never going to be okay with that. And 
they are going to always be opposed to that in a fundamental 
way, then I think as long as we have a long-term fundamental 
reason to stay in the Middle East, that is the bigger term of 
threat in terms of creating a permanent destabilizing presence 
in the region.
    Mr. Salmon. Thank you. I yield back.
    Chairman Royce. Mr. David Cicilline of Rhode Island.
    Mr. Cicilline. Thank you, Mr. Chairman. Thank you to our 
witnesses. And I think all of us, particularly after viewing 
your testimony and several other hearings we have had on this 
issue understand that we have to do everything that we can and 
use all of the tools available to us to keep the pressure on 
and really took to confront the IRGC and Iran and the region.
    So my questions are first to you, Mr. Modell. You said the 
Obama administration has demonstrated an unwillingness to 
weaken the IRGC. So I am asking you what you think the 
administration should be doing to effectively weaken the IRGC?
    Mr. Modell. One of the things that I mention in my 
recommendations was the fact that the IRGC, if you want to look 
at one of the things that concerns the IRGC and the Supreme 
Leader and the conservative establishment in Iran, is that is 
the ongoing credibility of the IRGC. The IRGC--we have had one 
serious kingpin designation against the Iranians, against an 
IRGC general who was involved in narco trafficking with the 
Taliban and others. He is based in Balochistan and----
    Mr. Cicilline. I have limited time so can----
    Mr. Modell. Oh, sorry.
    Mr. Cicilline [continuing]. You just tell me, you know, 
what you think we should do.
    Mr. Modell. Recommendations? I think naming and shaming. I 
think there needs to be a campaign, a media campaign, not a 
covert. I think an open media influence campaign that points 
out all the things that the Iranian--that the IRGC, in 
particular, is doing to destabilize the region. I don't think 
we have done nearly enough of that.
    Mr. Cicilline. Okay. And with respect to the designation of 
the IRGC as a foreign terrorist organization, does anyone on 
the panel think they don't meet that definition? And if you 
don't, why not? And what would be the implications of that 
designation, particularly on Americans being held, but on any 
other facets of this conflict? Ambassador?
    Ambassador Benjamin. So the designation of the IRGC as a 
State Department-designated foreign terrorist organization, 
would be at odds with the entire history of designations, first 
of all, in that it would be a designating a state organ, a 
state entity. Iran is a state sponsor of terrorism, and as such 
is covered by a wide raft of different sanctions that are 
extremely comprehensive. And to add the IRGC to this, it seems 
to me, would add, practically speaking, nothing to our arsenal 
of tools, nothing meaningful.
    And what is more is that there remains in effect a large 
array of Treasury designations against the IRGC as I mentioned 
before for terrorism, proliferation, human rights violations. 
We have all the instruments we need. And I think that to do 
something additional like this would both be unnecessary from a 
functional standpoint. And from a signalling standpoint, I am 
not sure that it is exactly what we need at precisely the 
moment that we want to see more--we want to see an effective 
implementation of the JCPOA.
    Mr. Cicilline. Well, with respect to that, Ambassador 
Benjamin, you said in your testimony that additional terrorism 
campaign or an additional terrorist campaign by Iran would 
scuttle the agreement, referring to the JCPOA. Why do you think 
that would scuttle the agreement? I don't see anything in the 
agreement that would, in fact, be in violation if they engage 
in terrorism.
    But the argument was made that it is better to confront a 
nonnuclear Iran than a nuclear Iran, which I agree. And you 
said the U.S. is in a good position to deter and prevent 
increased terrorist activity. Through what means? What do you 
think would be the most effective way for the United States to 
do that, particularly since I don't think engaging in terrorism 
is a direct violation of the JCPOA.
    Ambassador Benjamin. I think as a political matter if there 
were a widespread perception that Iran was using this 
opportunity to carry out a widespread--a massive terror 
campaign, I think that it would inevitably cause a reaction by 
Washington. I think that is just pure commonsense politics.
    In terms of being able to deter, let's just break it down. 
And I will recap some of my testimony. So Iran has, since 1996, 
not carried out a terrorist attack against the United States, 
and has only had one major plot revealed, and that was the 
very, very strange Arbabsiar plot involving the desire to kill 
the Saudi Ambassador here in Washington.
    I think that the Iranians have a healthy respect for our 
counterterrorism capabilities, for our intelligence gathering, 
and for our law enforcement, and are unwilling to be caught and 
to risk the kind of global opprobrium that they experienced 
after the Arbabsiar plot when there was an overwhelming U.N. 
general assembly resolution condemning them.
    I do believe that they will continue to try to provoke 
Israel, and I think that they will try to show that they can do 
two things at once and that they are still the leaders of the 
resistance. And I think for that reason our commitment to 
Israel's security has to be unwavering. We have to continue 
funding Iron Dome and continue the very robust support for 
Israeli defense, intelligence, and counterterrorism activities.
    And as for how we work with our Arab partners, you know, I 
think that the solution, the secret of our success has been 
excellent intelligence. And I think that we should deepen that 
intelligence cooperation with these countries. But, you know, I 
just note that the circumstances are becoming more difficult as 
some of these countries are themselves doing things that cross 
red lines for us, including, for example, their support of 
extremist groups in Syria.
    And so to come back to my main theme, we are living in a 
different Middle East. And I think that we need to think long 
and hard about what America's role is in the midst of this 
sectarian conflict.
    Mr. Cicilline. Thank you. And my time is up. Thank you, Mr. 
    Chairman Royce. Mr. Jeff Duncan of South Carolina.
    Mr. Duncan. Thank you, Mr. Chairman.
    Ambassador Benjamin, I want to go to your statement for 
just a minute which I thought was spot on in so many ways. But 
you say that Iran remains by a significant margin the foremost 
state sponsor of terror today. You go on to talk about Iranian 
terrorist activity focused primarily on support to groups like 
Hezbollah, Hamas, and Palestinian Islamic jihad. And then you 
say roughly 5 years ago Iran and its proxy Hezbollah appeared 
to be laying the groundwork for a renewed campaign of terrorism 
outside of the Middle East. Notable arrests in places like 
Thailand, Kenya, India, Azerbaijan, Cypress, Bulgaria, and that 
operatives responsible were traced back to Lebanon and 
    So we are very familiar with the Iranian Hezbollah 
connection. So let's take a moment, and I chair the Western 
Hemisphere Subcommittee. Let's bring this closer to home. 
January 8 of this year there was an attempted bombing in 
Montevideo, Uruguay, that targeted the Israeli Embassy. A few 
days later, an Iranian diplomat Ahmed Sabatgold, 32, a 
political consultant of the Iranian Embassy suspected of being 
involved in placing the explosive device, fled the country. 
Wasn't expelled, but fled the country. We also know that very 
close to Uruguay is the tri-border region, which is heavily 
Lebanese Hezbollah. Lot of financial transaction and other 
things. You could tie that into the bombing in Buenos Aires. 
You could go back a long ways, but just keeping it present day, 
January in Uruguay.
    And then we had five Syrian refugees, migrants, whatever 
you want to call them, who traveled on fake Israeli passports 
to, hello, the tri-border region where they were able to 
purchase, through Hezbollah, other fraudulent passports which 
turned out to be Greek passports. After travelling a little bit 
in South America, made their way to Honduras on fake Greek 
passports. Now, they may have been farmers, may have been 
students. We don't know what their plans were, but there is a 
connection between illicit activity in the tri-border region 
and Hezbollah, which is an Iranian proxy organization, tied to 
terrorism all over the globe, not just the ones that I 
mentioned in Uruguay and Argentina. And if you think about what 
you mentioned in your statement about, and I can't pronounce 
his name, but the Iranian that was implicated in the 
assassination attempt of October 2012--is that right--trying to 
come across the southern border with the help of the Mexican 
cartel, and lo and behold, it was a DEA agent. We got lucky. 
May not always get lucky.
    Then you factor in the issue that General Kelly at SOUTHCOM 
brings up that Iran has opened 80 cultural centers in Latin 
America in the last, what, 15 years or less, where there is not 
really a large Muslim population. Okay? So we got tri-border 
region and Hezbollah. We have got 80 cultural centers in Latin 
America. We got an attempt by a Quds Force operative to 
assassinate the Saudi Ambassador by coming across our southern 
border working with the drug cartel. We have got General Kelly 
pointing out the cultural centers and raising the alarm.
    So I just want to hear your thoughts on how we combat Iran 
and the Quds force here in the Western Hemisphere knowing all 
of this. And am I wrong to start raising the flag about this 
issue? Ambassador.
    Ambassador Benjamin. So Hezbollah has been present in many, 
many countries around the world since, really, the 1980s. And 
their presence is overwhelmingly in the Western Hemisphere and 
in West Africa where there are lots of Hezbollah operatives. It 
has been overwhelmingly about economic activity, but we still 
need to be very vigilant about the possibility that they may 
seek to get involved in violence.
    The United States has close liaison relations with most of 
the countries in the hemisphere, and takes the responsibility 
to surveil these operations very, very seriously. With the 
exception of Venezuela, I think we have had very good 
cooperation from most of our partners. And of course you didn't 
mention Venezuela which has been a subject of concern regarding 
Hezbollah, in particular Iran, for many years. And I think 
that, you know, this is the world we live in.
    I have written and said on many times that we need to 
continue our investments in intelligence and in law 
enforcement, and work with these countries to ensure that we 
have tabs on everyone who is doing anything, and then to prompt 
them when the time comes to take legal action or to expel these 
people. And on many occasions they have done so. I actually 
think that the level of Hezbollah infrastructure, and I haven't 
had an intelligence community assessment on this in some time, 
and I am no longer in the government, but I think the level of 
Hezbollah infrastructure is somewhat diminished from what it 
was in, say, the 1990s.
    And we have had some really impressive successes against 
Hezbollah. For example, the case involving the Lebanese 
Canadian Bank which led to the forfeiture of I believe $140 
million in assets, including the uncovering of this large-scale 
operation that involved sending used cars to West Africa in 
which--from the Western Hemisphere where they were then sold 
across Africa and the profits were mingled with Hezbollah drug 
money, for example, and then passed on to Hezbollah in Lebanon.
    So, we can't eliminate all of these bad actors everywhere 
at once, but I think that we have shown over time that we have 
a very, very capable intelligence community and our leaguettes 
around the world are working very, very hard, our FBI 
representatives, and I think that we continue this to keep the 
pressure on the group. Right now it is a group that is somewhat 
stretched by its involvement in Syria, and a group that I think 
wants to avoid being embroiled in an even wider conflict than 
the one it is. So it is, for example, being careful vis a vis 
    But, you know, at the State Department when I was 
coordinator, we kept a very close eye on this and were in touch 
with our colleagues around the world whenever we felt there was 
a need. And I think that we can continue those policies to curb 
Hezbollah activity. I believe you have to go back to the 
bombings in Argentina to find any violent activity in this 
hemisphere by Hezbollah.
    Mr. Duncan. And for your information, for the record, the 
State Department now doesn't take the Iranian activity, 
Hezbollah's activity in the Western Hemisphere much of a 
threat. And I have got the report that shows they did a very 
poor job in evaluating that. So----
    Ambassador Benjamin. Well, I think--so I would have to go 
back and look at the country reports or anything that they have 
submitted to you. I think that it is probably justified to say 
that the threat level is low but that the economic activity 
remains a matter of concern.
    Compared to the Sunni threat, compared to ISIS, compared to 
Al Qaeda in the Arabian Peninsula, I think that the threat from 
Hezbollah to Americans specifically is quite low.
    Mr. Duncan. Okay. I am out of time. I appreciate your 
frankness and I yield back.
    Chairman Royce. Thank you, Mr. Duncan.
    We go now to Mr. Ted Deutch of Florida.
    Mr. Deutch. Thank you, Mr. Chairman. Thanks to the 
witnesses for being here. And, Mr. Chairman, thanks for holding 
this hearing and giving us the opportunity to be reminded of 
Iran's sport for terrorism and the actions of the IRGC in 
    And I would like to focus in on one part of the JCPOA that 
we have touched on briefly, but I really want to understand 
better. We are moving forward under this deal, and there is a 
long list of individuals and entities who will see sanctions 
relief under the JCPOA. Coming off of the sanctions coming off 
are nuclear proliferation sanctions.
    This hearing is about Iran's support for terrorism. And we 
know that under existing law, individuals and entities can and 
should be sanctioned for their support for terrorism and for 
violation of human rights. So the question for all three of you 
is, shouldn't we, in advance of providing any sanctions relief 
to those individuals or entities for proliferation sanctions, 
shouldn't we go through all of them, determine which ones 
should still be sanctioned for their support for terrorism and 
never let them off to begin with?
    Mr. Alfoneh. Sir, I think in this context we need to 
distinguish between U.S. sanctions and EU sanctions because 
what we see is that most of the--actually all, every single 
individual and entity owned or connected by the Revolutionary 
Guards, still remains sanctioned by the U.S. Government.
    But when it comes to the European sanctions regime, they 
are going to remove actually most of the Revolutionary Guards 
units and personnel 8 years from the time of the implementation 
day. So the Europeans 8 years from now may be doing, engaging 
    Mr. Deutch. I understand that, Mr. Alfoneh. But I am 
focused on those individuals and entities who will get 
sanctions relief when sanctions relief is initially granted, 
not 8 years from now, but when they meet their nuclear related 
obligations. And from everything that I have read, there are--
everyone will acknowledge that some of them are on that list, 
some may be on there and are on there dual sanctioned for 
proliferation and for terrorism, but there are others who are 
on the list because it is easier to put them on the list for 
proliferation than it would have been to prove their support 
for terrorism.
    But if we are serious about stopping Iran from supporting 
terrorism, have any of you looked at that list and identified 
the individuals and entities who support terrorism and who 
should not be considered for sanctions relief at all? Mr. 
    Mr. Modell. Let me just say one of the recommendations I 
made the last time I testified which addressed this same 
question was, Treasury, which does a lot of great work, one of 
the things they either--and when asked by me directly to some 
people over there: Have you ever undertaken a comprehensive 
study to look at all the people who have been sanctioned and 
designated on the SDN lists, sort of where they are today, 
where that are now, how have they been impacted, are they still 
in business, how are they subverting sanctions, so forth. And 
the answer is, you know, they are poorly resourced. That is a 
different issue.
    But the answer I think to your question is is yes they 
should because a number of the people that are coming off the 
list, and I have seen a few that I haven't--that I am thinking 
of in particular were part of what is nothing short of a global 
trends national organized crime effort on the part of Iran. And 
in this case it was to circumvent sanctions and nuclear related 
issues. But those people were willing to commit crimes on 
behalf of the Iranian Government then. Now that you are taking 
them off the list, they are not going to stop being part of 
this global apparatus that is involved in illicit procurement 
    Mr. Deutch. Right. And, Ambassador Benjamin, there was a 
statement within the past few weeks from the Supreme Leader who 
said--I think it was the Supreme Leader who said that any 
effort to re-impose sanctions will be a violation of the deal. 
But clearly that wouldn't be a violation of the deal. The 
terror related sanctions were never meant to be a part of the 
deal. That is what we were told throughout. That is clearly the 
view of this committee, of the administration. So shouldn't we 
be, before granting sanctions relief, shouldn't we be pushing 
back to disabuse anyone in Iran of the notion that lifting of 
sanctions for nuclear proliferation means lifting of sanctions 
    Ambassador Benjamin. Well, I think your point is well 
taken. I think that the administration has been doing that 
pretty clearly in statements by the President, Secretary Kerry, 
Wendy Sherman, and the like. No one has been, to my mind, 
delisted for terrorism activities. If anything, everyone has 
been reaffirming that Iran is and will remain designated as a 
state sponsor.
    I cannot really say anything informed about the listings 
the Treasury has on individuals for terrorism, but I have 
certainly never heard that there have been people listed under 
proliferation because it was easier to do that than to do them 
for reasons of terrorism. Obviously these lists should be 
scrubbed regularly. There are issues of resources, but I think 
we just continue to repeat the message over and over again that 
bad behavior absolutely will not be tolerated.
    Mr. Deutch. Right. I understand. But, Ambassador Benjamin, 
shouldn't we scrub that list now, before sanctions relief is 
granted, to any of those individuals or entities to make sure 
that if someone on that list has been supporting terrorism and 
should be subject to sanctions that they continue to be subject 
to sanctions and they never come off that list?
    Ambassador Benjamin. I think that is self-evident. I think 
that if you find people who are sanctionable because of 
terrorist activity, they should be sanctioned, and we have made 
it clear that we will do that. We did it before and we should 
do it again.
    Mr. Deutch. And we should do it before there are sanctions 
relief granted. I appreciate it.
    Thank you, Mr. Chairman. I yield back.
    Mr. Engel [presiding]. We will go to Mr. McCaul.
    Mr. McCaul. I thank the chairman.
    Mr. Engel. That sounds nice, Mr. McCaul. We have a good 
chairman right now.
    Mr. McCaul. Yes, we do.
    Let me just--in 2012 the Obama administration basically 
admitted that the IRGC was one of the most powerful economic 
actors within Iran, that they own a network of front companies 
all over the world, essentially. And so while they claim that 
upon implementation day that the sanctions will still be in 
place on the IRGC.
    Wouldn't these front companies that are owned by the IRGC 
benefit? And, therefore, wouldn't the IRGC benefit directly 
from the lifting of these sanctions? I will start with you, Mr. 
    Mr. Alfoneh. Yes, sir. You know, to the extent that the 
Revolutionary Guards manages to establish new front companies, 
it would of course benefit, you know, by sanction evasion from 
the United States, but would also most directly benefit from 
the sanctions relief because the Iranian Government is funding 
the Revolutionary Guards' engagement in the economy of Iran.
    Even during the Presidency of Mr. Rouhani who certainly 
does not seem to be a fan of the Revolutionary Guards, there 
seems to be more Revolutionary Guards participation in 
development of Iran's economy, in many public projects which 
have been granted to the Revolutionary Guards, and I also think 
that this is the miscalculation of President Rouhani. He 
thought that he could buy and bribe the Revolutionary Guards 
not to oppose a nuclear deal. But what of course what will 
happen now is that the Revolutionary Guards takes the money and 
they will oppose the nuclear deal during the implementation 
    Mr. McCaul. That is interesting.
    Mr. Modell? I am sorry. Let's go down the--okay. 
    Ambassador Benjamin. I would just point out that there is 
sort of this belief that we are headed into a completely binary 
change. And the fact is, as I think has been well demonstrated 
over the years, the threat of Treasury sanctions is an enormous 
threat and a big hammer. We have unilateral sanctions remaining 
on lots of IRGC entities. And I think that the likelihood that 
foreign investors--of course no Americans will be investing 
because of the retention of our sanctions.
    But the likelihood that, say, European or Asian investors 
are going to suddenly strike deals with these entities if there 
is any shadow hanging over them is quite limited. Because in 
the end, the U.S. is still going to be prepared to cut those 
companies off from credit markets, and our ability to do so is 
quite remarkable.
    So, yes, in theory there is a danger there, and it is one 
we need to be vigilant about. But the Treasury has never been 
particularly shy about sharing information about those 
connections. And I expect they will be very aggressive in the 
future too.
    Mr. McCaul. And maybe, Mr. Modell, I will let you comment, 
and I will just throw out the last question because my time is 
running out. And that is there has been some discussion that 
under the section 219 of the Immigration Nationality Act that 
the IRGC should qualify as a foreign terrorist organization. I 
think that would give complete certainty that the lifting of 
sanctions would not benefit the IRGC. But I would throw that 
out to you.
    Mr. Modell. One of things I want to mention on your front 
company question before was that when you look at the ability 
of--and this is based on my own experience, but with the 
experience in talking to people who are serving--U.S. 
Government officials serving in the region now. When they 
approach our allies, particularly in the Southern Gulf, and ask 
for cooperation on trying to dismantle front companies, try to 
get more cooperation in working against front companies, 
working closely with the financial intelligence units to learn 
more about how they are moving men and money and material 
throughout the region, a lot of walls are put up.
    And I think if you are going to get serious about it, you 
need to go to places like the Emirates where there are hundreds 
and hundreds of companies that are springing up all the time 
that are in very few ways deterred by any sanctions that have 
been going on. So that is something I think needs to be 
    Mr. McCaul. That is a great point. What about the 
designation as a foreign terrorist organization? Would you 
agree that they should be?
    Mr. Modell. You know, I just think it is so intertwined. I 
appreciate, you know, Ambassador Benjamin's point earlier that 
it would go against historical precedent, but I think when you 
look at the way the dimensions of the IRGC and how interwoven 
they are with regard to a singular mission of--that happens to 
overlap with terrorism and a lot of the illicit activities they 
do around the world, I just don't know how you are going to 
deter them otherwise.
    And I think one point that needs to be made is the Iranians 
have been very clear in saying, maybe not explicitly, but their 
main goal has always been to get rid of European sanctions. 
That is how it was before 2012. They were perfectly fine to 
live with a comprehensive trade ban. They can survive with it 
or without it.
    So I think if you are going to get--you know, it is worth 
exploring that if you did do that you would have an extra 
deterrent for Europeans to do business with them, and that 
might be an extra way of prodding them to change their 
    Mr. McCaul. Mr. Alfoneh, do you have any opinion on that?
    Mr. Alfoneh. My organization agrees with Mr. Modell's 
suggestion that the entire organization should be designated as 
a foreign terrorist organization. I have a slightly different 
approach in this regard because I would like to punish those 
entities of the Revolutionary Guards which take part in the war 
in Syria. And we can document their presence in Syria.
    And the difference, I think, hopefully, and both are 
methods, I think, you know, have their own, you know, merits, 
but I also believe that my approach would have the added value 
of starting a process and discussion hopefully within the 
Revolutionary Guards. So they try to understand the price that 
they are paying for supporting Basar al-Assad's regime and 
keeping on his throne of blood.
    Mr. McCaul. And, Ambassador, I presume you would be opposed 
to that designation?
    Ambassador Benjamin. Yes. I did summarize my reasons 
before. Again, it would be, on the one hand, a complete break 
with our tradition of how we do foreign terrorist 
organizations. We have never designated at the State Department 
a government organ. And I think that actually the existing 
sanctions under the designation of Iran as a state sponsor of 
terrorism, as well as the whole array of other executive order, 
Treasury designations and the like, are more than ample 
currently for--certainly for enforcement purposes. And I don't 
see any additional messaging purpose that would be fulfilled 
through this.
    Mr. McCaul. I see my time has expired.
    Chairman Royce. Lois Frankel of Florida.
    Ms. Frankel. Thank you, Mr. Chair. Thank you. This has been 
a very interesting discussion. And I have some very, I will 
say, simplistic questions.
    First of all, in terms of--we have been saying IRGC, and 
then we are talking about Iran. For the funding of Hezbollah, 
is it the IRGC that funds Hezbollah, or is it Iran, or is it 
both? How does that exchange happen?
    Mr. Alfoneh. I only do my analysis, you know, in open 
source. So it is very difficult for me to give you a precise 
answer. But, you know, the way that it operates is usually 
    So the Iranian Government, in the old days, in the 1980s, 
for example, they would on the national budget tell the entire 
world that Iran is supporting, let's say, Islamic jihad or 
Hezbollah, and be so and so many millions of dollars. But then 
in mid-1980s there were several lawsuits against the Government 
of the Islamic Republic of Iran in the U.S. because there were 
victims and family members of victims of terrorists who could 
refer to the national budget of the Islamic Republic of Iran 
and prove that Iran is a state sponsor of terrorists.
    So ever since mid-1980s, the Islamic Republic has been 
trying to hide the mechanisms through which they send money to 
Hezbollah. So we do not have open source information available 
for you. But some of that money is through Revolutionary 
Guards. Some of that money is through the office of the Supreme 
Leader. Some of that money is through the cultural centers. 
Even the construction base of the Revolutionary Guards, Khatam 
al-Anbia, is engaged in housing projects in Lebanon, 
particularly after the 2006 war. So there are multiple channels 
through which the Islamic Republic is funding Hezbollah.
    Ms. Frankel. Did you want to answer? Because I have a 
couple other questions.
    Ambassador Benjamin. I would just say very quickly, I think 
it is a kind of distinction without a difference. Hezbollah is 
funded because it is a national priority of the Government of 
    Ms. Frankel. Okay. So my next question really has to do 
with, I guess, the relativity of Hezbollah's efforts in the 
Middle East toward the conflict. If Hezbollah was not present 
in Syria, how much difference do you think that would make?
    Mr. Alfoneh. Well, the Bashar regime would have collapsed 
because the Islamic Republic was not ready a few years ago to 
deploy large-scale forces of the Revolutionary Guards in Syria. 
Hezbollah has been doing the job of the Revolutionary Guards 
and seems also to have been suffering a large number of 
    My study of the Iranian casualties shows me that since 
January 2012, 201 Iranians have been killed in combat in Syria. 
The number for Lebanese fighters, Hezbollah fighters in Syria, 
in the same period of time seems to be above 1,000, possibly 
    Ms. Frankel. So does anyone else want to take a stab at 
that? So let me say, if Hezbollah was removed or if--let me put 
it this way: If Hezbollah was not being funded by Iran, would 
there be more likely a collapse of the Assad regime?
    Ambassador Benjamin. I think I would only say, and we are 
in a very hypothetical world here----
    Ms. Frankel. Yes.
    Ambassador Benjamin [continuing]. That it is kind of hard 
to imagine what that world would be like because Iran's 
interest in Syria is above all about the resupply and the 
connection with Hezbollah. So, you know, we would be taking the 
heart out of the jigsaw puzzle.
    Ms. Frankel. No, no, the reason I guess--well, my motive 
for asking that question is because I think a lot of us were 
concerned with this Iran agreement because we saw a direct 
connection between Iran getting money, more money, funding 
Hezbollah, and creating this horrible conflict in Syria. So let 
me just ask another question if I could follow up. If Iran was 
not funding Hezbollah, what would you think would be the affect 
on peace in Israel?
    Mr. Modell. Again, that is a big hypothetical, but let me 
just--let me make a couple of comments on the Iran/Hezbollah 
relationship, the way I have seen it evolve, particularly since 
2012. Point number one is when sanctions really started to hit, 
okay, entire operational units of the IRGC itself had to--their 
funding levels went down. Their activities, as a result, went 
down. And not only IRGC, but Hezbollah as well and other groups 
that were on the receiving end of Iranian Government funding 
also were put on hold.
    So before the JCPOA took place and the Iranians were 
feeling the brunt of this pain of sanctions, their operational 
activity did decline, and but I would also say that Hezbollah 
has evolved into its own organization. It has its own identity. 
And to a certain extent by Hezbollah--over the last decade, if 
not more, Hezbollahhas developed its own ways of generating 
revenue. They don't depend entirely on Iran as they did in the 
earliest years of the revolution.
    Ms. Frankel. Okay. Well, that was really what my question 
was. So you are saying now that--well, what would you say 
percentage-wise their own funding versus relying on Iran?
    Mr. Alfoneh. The open source, I cannot give you a precise 
estimate, madam, unfortunately.
    Ms. Frankel. Mr. Chairman, I have one more--I think it is 
like--well, three of us are left here. We have had so many 
different meetings in the last month or 2 months or whatever, 
or the year, about what is going on in Syria. In your opinion, 
will the IRGC be okay with a transition out of Assad?
    Mr. Alfoneh. The clear answer is no, madam. They have 
invested in the person of Bashar al-Assad. All the commanders, 
senior commanders, of the Revolutionary Guards have supported 
Bashar al-Assad personally in the Iranian press. It would be a 
terrible loss of face for them. But there seems to be 
discussions within the regime. So the President of Iran, 
President Rouhani, he has sent some signals which we could 
interpret as some degree of readiness to cooperate with someone 
else, you know, than Bashar al-Assad. But that is not the 
signals we hear from the Revolutionary Guards.
    Ms. Frankel. Anybody else?
    Ambassador Benjamin. I would just say that it is very hard 
to conceive of any Iranian acquiescence in a peace plan that 
involves both the removal of Assad and his non-replacement by 
one of his inner circle allied senior leaders, I think that 
that is--that is kind of a non-starter for the Iranians, even 
if they do come to the conclusion that the person himself does 
not have to stay there forever.
    Ms. Frankel. Okay. Thank you very much. I yield back.
    Chairman Royce. All right. Mr. Curt Clawson from Florida.
    Mr. Clawson. Thank you, gentlemen.
    Ambassador Benjamin, you have stated that the 
administration will still be able to rely on U.N. Security 
Council resolutions that levy arms embargoes against key areas 
of concerns such as Shia militias in Iraq, Hezbollah, and 
Lebanon, and in folks in--Houthis in Yemen.
    Now, Iran does billions of dollars' worth of trade with the 
Gulf States. They do billions with Europe. No oneis going to 
stop that unless it is us. I mean, you know, I don't know all 
the different lists. This list, that list, the other list, the 
Treasury Department. But I know everybodyis doing business with 
everybody. And if we were serious and we really wanted to stop 
it, we would stop it.
    Last time I checked, we were almost a third of the global 
GDP. Our trade deficit is $40 billion a month. And a lot of 
that goes to the people that we would need to cooperate with us 
from Europe and from that region. And no one can survive 
without our financial system. No one. If we wanted to stop 
Iranians enriching themselves, we wouldn't be talking about 
lists, and we wouldn't be talking about the U.N. We would just 
say: Hey, anybody doing business with you-all can't do business 
with us. And that is going to shut your economy down. And 
anybody taking their money can't do business with our banks, 
and that would shut their financial access down.
    It seems to me that this is just some sort of economic 
charade. I wouldn't depend on the U.N. to shut down the money 
into Iran. We have a third of the global GDP. Why would we go 
to the Security Council? If we wanted to stop these folks from 
getting guns to point at Israel and to point at our allies, we 
ought to get serious about economic sanctions and economic 
leverage that we have. And it just always make me irate when we 
go through these lists when we just allow everyone to trade 
with these folks. You know we do. You know we do.
    Are we ever going to get serious about stopping the trade? 
Because if we wanted to, we are the only folks--now, I know 
Russia won't, but our friends in Europe trade with them. And so 
do folks in the region. And we all know it. We just allow it to 
happen. Are you going to tell me they are not doing trade or 
that we couldn't stop them? What are you going to tell me here?
    Ambassador Benjamin. Well, first of all, your points about 
America's economic power I think are largely on point, and it 
was because we exercised that economic power that we got the 
Iranians to the table to negotiate over their nuclear program.
    What I said about the, and what I testified about the 
Security Council resolutions, is that they give us the 
authority under international law to stop certain kinds of 
trade. So for example, as I mentioned before, weapons from Iran 
designated for the Houthis in Yemen were seized on the high 
seas because we had the right under a Security Council 
    Mr. Clawson. But my question, Ambassador, is why would we 
outsource our economic leverage to someone else? We have the 
largest market in the world. I don't want to ask permission 
from somebody else to use my market access as leverage. We will 
only get a fraction of our leverage.
    You are saying that we are making progress by using the 
U.N. and all these things you are talking about today. It may 
be a little bit, but why wouldn't we use the full force of our 
financial system and the full force of our market leverage with 
everyone that does business with Iran? Because I don't think 
the U.N. uses the full force of our economic leverage due to 
our market capacity.
    Ambassador Benjamin. I am not sure, sir, to what end you 
want to use all that?
    Mr. Clawson. To keep Israel safe and our friends from 
getting killed and thousands or millions of refugees. That is 
what I would like to use it for.
    Ambassador Benjamin. Well, I think that history has shown 
that a mixture of different instruments, diplomacy, sanctions, 
military pressure, and the like, are the way to go. When we 
have tried in the past to have far-ranging secondary sanctions, 
we have had some success, but we also have encountered some 
very, very serious resentment from our allies, and it puts us 
in a very difficult position when we want to get other things 
from them as well. So the policymakers' job is to mix the 
instruments in a way that produces the desired effect. I think 
that our European friends if we suggest that we cut off all 
trade would say that is fine for you but not fine for us.
    Mr. Clawson. And you know what, I would say that if they 
wanted to do business in our big box retailers, which they all 
do, they may not like it; but they will go along.
    Do the other two of you all have anything to add? On what 
my point is? Am I off point here in any way? Am I wrong? Am I 
overstating the case of American power of economic leverage?
    Mr. Modell. No, I don't think you are overstating the 
economic leverage we have. I just think we have taken a 
dramatic shift to doing things in the way that Ambassador 
Benjamin has laid out in a multilateral sense, and we are not 
    Mr. Clawson. Well, it is not working. It is not working.
    Mr. Modell. Until the Europeans see that doing business 
with Iran is not in their interests, and we can't convince them 
otherwise, I don't see any way of how it is going to go 
    Mr. Clawson. I yield back. Thank you.
    Chairman Royce. Thank you. I thought I would return just 
with the panel here to a couple of news reports from April of 
this year. One includes a report from Israel's Security 
Service, publishing details of information on Hamas' 
preparation for war with respect to new tunnels being dug, and 
the Security Service said they had obtained from a Hamas 
fighter and tunnel digger arrested in that month, he provided a 
wealth of information on the terror groups' tunnel digging in 
the Gaza Strip, as well its methods for obtaining cash from 
Iran for the purpose of digging those tunnels. Iranian support, 
according to the report, came in the form of cash, weapons, and 
sophisticated electronic equipment meant to interfere with 
control signals for drones over the coastal enclave.
    And then the second report in the Wall Street Journal, 
according to a senior Western intelligence official, Iran's 
Revolutionary Guards during the last few months have 
transferred tens of millions of dollars to Hamas' brigades. 
Intelligence reports show that the funds have been transferred 
on the direct orders of General Soleimani, the commander of the 
Revolutionary Guards elite Quds Force who also directs the 
annual budget to finance Hamas' military operation.
    The funds, according to the intelligence reports, are being 
used primarily to help Hamas rebuild the network of tunnels 
that were destroyed during the Israeli defense forces response 
to rocket attacks launched by Hamas, militants from Gaza last 
summer. So at least one or two intelligence agencies have a 
different assessment. Just for the record since we had a 
dialogue on that, Ambassador, I raise that point again.
    Ambassador Benjamin. I would just say that those reports, 
so there were signs of rapprochement. You know, Hamas was 
expelled from Tehran some years ago. There were signs of a 
rapprochement earlier this year. I believe that rapprochement 
didn't happen during the summer because of Hamas' extensive 
meetings with the Saudis. But I am relying here on open source, 
and I strongly recommend that you request a briefing from the 
CIA on the subject.
    Chairman Royce. Well, thank you very much, Ambassador. I 
appreciate that. And, again, I appreciate the testimony of all 
of our witnesses here today. And so with that, we will stand 
    [Whereupon, at 12:13 p.m., the committee was adjourned.]



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