[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]
IRAN'S ISLAMIC REVOLUTIONARY GUARD CORPS: FUELING MIDDLE EAST TURMOIL
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HEARING
BEFORE THE
COMMITTEE ON FOREIGN AFFAIRS
HOUSE OF REPRESENTATIVES
ONE HUNDRED FOURTEENTH CONGRESS
FIRST SESSION
__________
DECEMBER 2, 2015
__________
Serial No. 114-135
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COMMITTEE ON FOREIGN AFFAIRS
EDWARD R. ROYCE, California, Chairman
CHRISTOPHER H. SMITH, New Jersey ELIOT L. ENGEL, New York
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
SCOTT DesJARLAIS, Tennessee
REID J. RIBBLE, Wisconsin
DAVID A. TROTT, Michigan
LEE M. ZELDIN, New York
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
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Page
WITNESSES
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
LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING
Mr. Ali Alfoneh: Prepared statement.............................. 7
Mr. Scott Modell: Prepared statement............................. 59
Mr. Daniel Benjamin: Prepared statement.......................... 67
APPENDIX
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
IRAN'S ISLAMIC REVOLUTIONARY GUARD CORPS: FUELING MIDDLE EAST TURMOIL
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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,
so.
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
grow.
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
back.
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.
STATEMENT OF MR. ALI ALFONEH, SENIOR FELLOW, FOUNDATION FOR
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
policies.
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.
objectives.
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
Pakistan.
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:]
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STATEMENT OF MR. SCOTT MODELL, MANAGING DIRECTOR, THE RAPIDAN
GROUP
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
policy.
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:]
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Chairman Royce. Thank you. Ambassador.
STATEMENT OF 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)
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:]
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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
combination.
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.
Engel.
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
it.
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
this.
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.
Alfoneh.
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
Guard.
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.
Chairman Royce. Thank you, Ileana. Mr. Brad Sherman of
California.
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
California.
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
of----
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
IRGC?
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
ahead.
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
reason.
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
efforts.
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
public.
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
achievement.
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
accurate.
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
taking.
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
out.
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.
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
Hezbollah.
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
Israel.
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
particular.
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
in----
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.
Modell.
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
activities.
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
altogether?
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.
Alfoneh.
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
phase.
Mr. McCaul. That is interesting.
Mr. Modell? I am sorry. Let's go down the--okay.
Ambassador.
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
addressed.
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
behavior----
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
indirect.
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
Iran.
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
casualties.
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
1,500.
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
resolution.
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
making----
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
otherwise.
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
adjourned.
[Whereupon, at 12:13 p.m., the committee was adjourned.]
A P P E N D I X
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