[Congressional Record (Bound Edition), Volume 154 (2008), Part 6]
[House]
[Pages 8282-8287]
[From the U.S. Government Publishing Office, www.gpo.gov]




                          U.S. FOREIGN POLICY

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
January 18, 2007, the gentleman from California (Mr. Sherman) is 
recognized for 60 minutes as the designee of the majority leader.
  Mr. SHERMAN. Madam Speaker, I thank the leadership for allocating 1 
hour to me of floor time.
  As a senior member of the Foreign Affairs Committee and as Chair of 
the Subcommittee on Terrorism and Nonproliferation, I will take the 
next hour to focus on our foreign policy and to see whether it is 
focused correctly on the threats that face us in the first quarter of 
the 21st century. Then, if time permits, I will discuss an issue--some 
would say a threat--that will face us in the second and third quarters 
of the 21st century.
  Madam Speaker, I believe that our foreign policy has been adrift 
since the end of the Cold War because we have been unable and unwilling 
to prioritize. Our national case of ADD forces us to focus on whatever 
international objective flits across our consciousness.
  We have an enormous national ego which causes us to believe that we 
can simultaneously and successfully pursue all our objectives, and that 
we can defeat evil everywhere we choose to notice it. As a Nation, we 
punish politicians and pundits who dare to deflate our enormous 
national ego.
  Our bureaucracy opposes any effort to prioritize our objectives 
because that effort conflicts with the bureaucratic imperative to 
please every one of its bureaus. Imagine having to go to the Moldova 
desk in the State Department and say that Moldova's sovereignty over 
its Transdniestra region cannot be a major national priority. The State 
Department is pretty much on autopilot, with each of its bureaus 
focusing on the bureau's function, the bureau's priority, with no one 
setting overall national priorities.
  As a Nation, we have sacrificed 4,000 of our finest, and untold 
treasure. We did so in Iraq because our leaders told us it was 
necessary in order to protect ourselves from weapons of mass 
destruction, weapons that did not exist. But just because we are able 
to sacrifice treasure and lives to protect ourselves from a nuclear 
program that did not exist does not mean that we can sacrifice our 
national ego and our bureaucratic imperatives to focus on real threats 
that do exist.
  Now, in addition to these long-standing institutional and 
psychological barriers to prioritization, at present we face three 
practical barriers that also prevent us from focusing on the national 
threats that we should really focus on, that we should give our 
priority to. The first of these is our unhealthy fixation on Iraq. This 
fixation began with President Bush. It now afflicts us all.
  Now, we are told that morally we must stay in Iraq because we ``broke 
it,'' but we are told this by the same people who rightfully point out 
that whatever shape Iraq is in today and whatever shape we leave it in 
is still superior to where it was under Saddam. Remember, Saddam killed 
hundreds and hundreds of thousands of Iraqis through his policies. 
We're told we must stay in Iraq because we risk a humanitarian problem 
if we leave, while at the same time this Nation ignores actual 
humanitarian holocausts that are going on in places like Somalia, Chad 
and Congo. Those humanitarian holocausts don't count because CNN isn't 
there. And CNN isn't there because our troops aren't there. So our 
troops must stay in Iraq because CNN is in Iraq, and CNN is in Iraq 
because our troops are in Iraq. So we must stay there because we are 
there. This is no way to prioritize our foreign policy.
  We are told that if we leave Iraq, terrorists could meet there and 
plot against us. Imagine how big a national ego we must have to think 
that we could possibly deprive our enemies of a conference room. The 
fact is that terrorists can and do plot against us in Somalia, in 
Yemen, in countless other places, but of course these don't count 
because CNN isn't there. Remember, however, that 9/11 was plotted in an 
apartment building in Hamburg, Germany, which makes you wonder why we 
are staying in Iraq to make sure that terrorists don't have a place to 
plot against us. So our fixation with Iraq prevents us from 
prioritizing our foreign policy, prioritizing the need to protect 
Americans from nuclear attack. But that is just one of the obstacles we 
face.
  The second obstacle we face is an unhealthy fixation on our 
reflexive, unthinking and implacable anti-Russian attitude. Now, I 
don't mind being anti-Russian. I do mind being implacably, 
unthinkingly, and reflexively anti-Russian. Now, part of this stems 
from our great national hubris. Our foreign policy establishment 
doesn't like Mr. Putin or his so-called successor, and we don't think 
that we should have to accommodate anybody we don't like. The fact is 
that sometimes you do have to do business with people you don't like if 
you want to carry out a reasonable, prioritized foreign policy. Our 
politicians tell us that we are at war. Well, the last truly great 
wartime leader of the United States was President Roosevelt, and he did 
business with Putin's most venal predecessor.
  Now, this reflexive, anti-Russian attitude grew up in large part 
because of the individuals who are making our foreign policy decisions 
today. These are people who spent their lives planning and studying and 
writing their theses on how to surround and defeat the Soviet Union. 
Old habits die hard, but yesterday's priorities should not dictate 
tomorrow's priorities.
  Now, Putin has given us much to be angry about, but let us take a 
look at whether this new Cold War, at worst, or very cold peace, at 
best, started with Moscow or started in Washington.
  Now, one issue that has faced us throughout foreign policy is the 
doctrinal battle between the doctrines of self-determination and 
territorial integrity. Self-determination, the right of a group of 
people within a country to split up, split off, and form their own 
country; territorial integrity, the right of a nation to continue to 
have and to possess and to control its territory.
  In fact, the two great wars fought on American soil were on opposite 
sides of this doctrinal distinction. Our first great war on our own 
soil was our war for self-determination, our war for independence. The 
second great war was the war to protect our territorial integrity from 
those who sought southern independence. So we have been on both sides 
of this doctrinal divide. We face this same divide now, territorial 
integrity versus self-determination.
  Let us examine eight places in the general neighborhood of Russia 
where this doctrinal conflict has come up. You see, we are for self-
determination of Kosovo just as we were for the self-determination of 
the Slovenes and the Croats, which led to the split up of Yugoslavia, 
and we were for the self-determination of the various republics that 
made up the Soviet Union. Four times that we were for self-
determination--Kosovo, Slovenia, Croatia, and the Soviet Union itself.
  But we are against self-determination and instead for territorial 
integrity in at least four areas also close to Russia. We are against 
self-determination of the Transdniestra region of Moldova. We are 
against self-determination for the northern part of Kosovo that would 
like to self-determine itself out of Kosovo and rejoin Serbia. And we 
are against self-determination for two regions of the Republic of 
Georgia, Abkhazia and South

[[Page 8283]]

Ossetia. Eight conflicts; four times we support self-determination, 
four times we support territorial integrity.
  Some would say we are inconsistent. This is not the case. We are 
consistently anti-Russian; consistently, unthinkingly, and reflexively 
anti-Russian. In all eight of these conflicts, Russia had a strong 
interest. In most of these conflicts, we had virtually no interest. Who 
amongst our constituents talks to us about Abkhazia or South Ossetia? 
Yet every time, in all eight instances, we took a very strong and 
determined anti-Russian position.
  We also have a conflict with Russia over the proposal to build a 
missile defense system in the Czech Republic and in Poland.

                              {time}  1845

  Russia believes that we are rushing to install these installations to 
create anti-Russian facts on the ground in Eastern Europe. Our position 
is that those missile defenses will protect Europe from a possible 
Iranian nuclear-tipped missile. But the Europeans don't particularly 
want our missile defense system. We have to bribe the Czechs and the 
Poles to let us put them there. The Germans and the French would just 
as soon we not build them.
  Why are we taking this aggressively anti-Russian position? One would 
say that the goal is to protect Europe from Iranian nuclear weapons. 
But wait a minute. We have not even tried to bargain with Russia, to 
seek their help in preventing Iran from getting the nuclear weapons in 
the first place. Perhaps in return for not building a missile defense 
system, we could achieve greater cooperation from Moscow in stopping 
Iran's nuclear program. But we are unwilling to prioritize. We have as 
a priority creating anti-Russian facts on ground in the Czech Republic 
and Poland; and, accordingly, we cannot sacrifice the opportunity to 
build missile defense systems in those countries just to get Moscow's 
critical help in preventing Iran from developing nuclear weapons.
  I could give you a number of other examples. Let me just focus on 
one, and that is the recent commercial disputes between Ukraine and 
Russia. In those disputes we have told these two groups of former 
Communists of these formerly Communist countries that it is wrong to 
sell goods, in this case, natural gas, for its fair market value. We 
have told former Communists that capitalism is wrong. Why? Because 
capitalism would allow Russia to get more for its natural gas, and our 
tendency to be reflexively anti-Russian exceeds our tendency to support 
capitalism. So we face a second practical block to prioritizing our 
foreign policy, and that is our instinctively anti-Russian attitude.
  But we also face a third block to prioritization, which is our 
failure to recognize how important it is to get the support of world 
opinion, particularly opinion in Western Europe, in order to achieve 
what should be our number one national priority, which is protecting 
the American people from nuclear weapons.
  Now, think back to 9/11. We had the sympathy of the whole world. 
People were ready to follow our leadership. People demonstrated in 
favor of America in places where they had not demonstrated in favor of 
America before or since. But then what did we do? We ignored Kyoto. We 
invaded Iraq. We disdained the International Court of Justice. We built 
Guantanamo. We angered our friends and our allies with unilateral 
approaches on the wrong set of issues. Today, who would say that the 
United States has the support or the sympathy of the world? We need to 
prioritize. The real threat is nuclear weapons in the wrong hands.
  Now, I am going to avoid using the term ``weapons of mass 
destruction'' because that has been a phony and misleading term. It 
puts nuclear weapons in the same category as chemical or biological 
weapons. Only nuclear weapons could kill millions of Americans.
  Now, I don't want this speech to be too depressing. We are 
vulnerable. We are institutionally and psychologically unable to focus 
on how to reduce our vulnerability. But we are still far safer than we 
have been at other times in our history. In the 1960s we faced a far 
greater threat. At that time we faced the risk of thousands of Soviet 
nuclear weapons, 10 megatons or more each. Now we face less than one 
five-hundredth the arsenal of the Soviet Union in terms of number and 
less than one five-hundredth in terms of the strength of each nuclear 
device. So we are far safer now than we were when we, as baby boomers, 
as elementary school students, were ducking under our desks in air raid 
drills in order to learn how to protect ourselves from a massive Soviet 
nuclear attack.
  Now, let us say that we could overcome our obstacles to a rational, 
prioritized foreign policy. What would be our response to the nuclear 
threat that we face? There are four possible responses to a nuclear 
threat: Prevention, deterrence, interception, and survival. I will deal 
briefly with the last three of these and then focus on the first, 
prevention. And by ``prevention'' I mean preventing the wrong people 
from getting the most powerful weapons.
  Now, deterrence and interception are, I think, false hopes because 
they miss the mark on the delivery system that is most likely to be 
used by those who wish us harm. For 20 and 30 years, we have talked on 
this floor about Star Wars or national missile defense, how we're going 
to hit a bullet with a bullet in outer space. Maybe someday it will 
work. But missile defense can be rendered irrelevant. It doesn't take a 
rocket scientist to deliver a nuclear weapon to an American city. A 
nuclear weapon is a bit smaller than a person, in most cases. You could 
smuggle one inside a bale of marijuana.
  Now, we have had a lot of talk on this floor about how to make our 
borders more secure and deal with the issue of illegal immigration. To 
date, our efforts have increased the fee charged by the so-called 
coyotes to smuggle an illegal immigrant into the United States up from 
$1,000 to $1,500. This may have a substantial impact on those people 
who aspire to work in the United States for minimum wage. But whether 
the cost of bringing in something the size of a person is $1,000 or 
$10,000 or $100,000 is not going to matter much to the Iran 
Revolutionary Guard Corps. We are not going to have borders so secure 
that a truly sophisticated terrorist group or intelligence agency will 
not be able to bring a bomb across our borders. Keep in mind we have 
300 million legal border crossings every year. We have zero patrol 
officers, zero on the entire border between Alaska and Canada. Between 
Canada and the lower 48, we have roughly one security official every 30 
or 40 miles, and that person is only working 8 hours a day. So 
smuggling a nuclear weapon will not be difficult for any adversary 
sophisticated enough to get its hands on a nuclear weapon in the first 
place.
  Not only is smuggling easier, it gives the perpetrator plausible 
deniability. If you send an intercontinental ballistic missile into the 
United States, we will know where it came from. On the other hand, if 
you smuggle one here, you can always deny that you did it or leave some 
plausible deniability, and deterrence will be undermined, and, as is 
obvious, interception is made irrelevant if weapons are smuggled into 
the United States.
  Now, I know that the great dictators really want an intercontinental 
ballistic missile. It's the Viagra of tyrants. But as a practical 
matter, our enemies will determine that smuggling a nuclear weapon 
makes more sense for them. It provides them with plausible deniability 
to deter deterrence. It makes irrelevant all of our missile defenses. 
The other problem with deterrence is that Iran may not be deterrable, 
and I will get to that in just a few minutes.
  So I have dealt with deterrence and interception. Let us turn to 
survival, civil defense. This is a subject you are not allowed to talk 
about on the House floor or anywhere else in polite society. The First 
Amendment protects many kinds of speech but not talking about civil 
defense because you have to turn to Americans and say your government 
may not be able to protect you from nuclear attack. We may be in a 
circumstance where we can reduce casualties from 200,000 down to 
100,000. Our

[[Page 8284]]

problem is that the American electorate finds the death of even 100 
Americans to be unthinkable.
  Now, we could cut casualties in half or by more than half if we 
prepare civil defense. But if a nuclear weapon the size of the one 
tested by North Korea went off at the White House, about 2 miles away, 
the people in this room would survive, but none of us would know what 
to do or where to turn for information. Should we shelter in place? 
Should we flee, and if so, in what direction? We need a system to tell 
Americans what to do. And we have to take Americans into our confidence 
and tell them that this is a real threat, that we are working to reduce 
the threat, and that we are working to prepare for the threat.
  Now, I know that survival is something that we dealt with in the 
1960s when we did those bomb drills I was talking about. What might 
have been absurd when we did it is now laughed at when it would be 
useful because in the 1960s, had we been hit by our adversary, it might 
well have been a thousand 10-megaton weapons. No one could have 
received medical care. There would be no relief into the city from 
outside the city. The living would envy the dead.
  In contrast, Iran might develop one or two 15-kiloton weapons, 1 to 2 
percent the size of the weapons of the Soviet Union, less than 1 
percent of the number. We would be able to bring in medical care from 
outside. We should talk about it. We should plan for it. But I know 
that no politician or pundit is allowed to do so; so I will stop and 
instead shift to a discussion of prevention, keeping nuclear weapons 
out of the worst hands.
  Now, I know that we should prevent the worst regimes and 
organizations from obtaining nuclear weapons. How do we do that? 
Maximum carrots, maximum sticks, maximum focus. We need to prioritize. 
We need to maximize our options. And, finally, maximum linkage, by 
which I mean connecting our objective of deterring a nuclear Iran or a 
nuclear North Korea with objectives that are important to other 
countries, not only North Korea and Iran themselves but Russia and 
China.
  Let's first look at North Korea. I think North Korea is less 
important than Iran because North Korea is not ambitious. It wishes 
only to survive and to oppress its people in its own territory. What we 
need in order to deal with North Korea is the carrot of offering a 
nonaggression pact, a treaty in which we would agree not to invade 
North Korea.
  That's what the North Koreans have asked for. If the North Koreans 
are going to get rid of their nuclear weapons, you would think at a 
minimum they would want a promise from the United States that we're 
never going to invade. Believe it or not, the American response has 
been no. Why? Because the neocons never want to give up their dream of 
invading North Korea. This has made progress at the six-party talks 
uncertain at best. We are unable to prioritize our need to eliminate 
North Korea's nuclear weapons program over the psychological need of 
neocons to dream of invading North Korea. Instead, we need maximum 
carrots for the North Korean regime if they will verifiably and 
permanently get rid of their entire nuclear program.
  We also need maximum sticks. We don't have many sticks. China has the 
sticks. North Korea is utterly dependent on Chinese aid, and yet we 
have failed to use linkage. In all our discussions with China, we have 
told them that our attitudes toward trade and their currency 
manipulation will not be affected by their attitudes on 
nonproliferation. We are a nation that has lost 4,000 lives to protect 
us from Saddam's nuclear program that did not exist, but we are 
unwilling to link our policy on currency values to China's behavior 
with regard to weapons, not weapons of mass destruction, but the real 
important ones, the nuclear weapons.
  Our State Department opposes linkage because they find it more 
convenient to just deal with one issue at a time in separate bureaus, 
in separate boxes. We need to link China's policies toward 
proliferation with our policies on issues important to China.

                              {time}  1900

  Now let's turn to Iran. Iran is more dangerous than North Korea 
because it is ambitious. It is already responsible for terrorist 
attacks as far away as Buenos Aires, which is as far as you can get 
from Tehran. It seeks to remake the Muslim world and then the entire 
world. An Iran with nuclear weapons is truly dangerous.
  Let's go through all the different ways it imperils the United 
States. First, an Iran with nuclear weapons means that you can say 
goodbye to the nonproliferation regime which has restricted the number 
of nuclear states since 1945. The Gulf Cooperation Council or Saudi 
Arabia acting individually will certainly develop nuclear weapons if 
Iran does. Egypt will not be far behind. And once nuclear weapons 
become popular for medium-sized countries and countries that do not 
face existential threats to their existence, once nuclear weapons 
become something that every country the size of Egypt has, how do you 
say no to Nigeria or Brazil?
  Not only would we lose the nonproliferation regime, but what affect 
would it have on Iran's policies? Imagine terrorism with impunity. Iran 
is already rated by our State Department as the number one state 
sponsor of terrorism. Imagine what happens if Iran has nuclear weapons. 
It puts us in a position where we cannot respond, even if we know that 
Iran is responsible for terrible terrorist acts.
  Now not only do you provide impunity for Iran to engage in terrorism, 
but you put us for the first time since the end of the Cold War eyeball 
to eyeball with a hostile and aggressive nuclear power. You are going 
to end up with a Cuban missile crisis every week, or at least several a 
year. Whether it is IEDs smuggled from Iran into Iraq or whether it is 
Iranian gunboats challenging American ships in the Persian Gulf, Iran 
will provoke us and will test us. We will go eyeball to eyeball with a 
regime considerably less sane than the regime presided over by 
Khrushchev.
  Now even if we survive dozens of confrontations with a hostile 
nuclear Iran, there may come a day, and we pray for this day, when the 
Iranian Government will see itself about to be overthrown. Do you think 
those mullahs are going to imitate the Soviet Communists, shrug their 
shoulders and walk off the world stage? Gorbachev wrote a book and went 
on a speaking tour. Do you think that is what is going to happen? No. 
If these extremists in Tehran feel that they are about to be 
overthrown, among their options will be to use their nuclear weapons 
against Israel in an effort to regain popularity on the streets of 
Tehran or to use their weapons on the United States figuring if they 
are going to go out, they might as well go out with a bang.
  Now I know that there was that NIE, that National Intelligence 
Estimate, released late last year that was deliberately designed to be 
misread. It said that Iran had abandoned its nuclear weaponization 
program. But if you read that report carefully, and I am not talking 
about the classified version, which I wouldn't talk about here, but 
just the two-page unclassified version, if you read it carefully, if 
you read the footnote, you realize that the real bottom line in that 
report is that Iran is well on target to have a nuclear weapon by the 
middle of next decade.
  You see, the key difficulty in producing a nuclear weapon is to get 
your hands on the fissile material. And the NIE says that Iran will 
likely have that fissile material by the middle of next decade. Now the 
easier part of building a nuclear weapon is to take that fissile 
material and do the engineering work to turn it into a weapon. This is 
called ``weaponization.'' The NIE, this big national intelligence 
report which got headlines around the world, says that for at least a 
while, Iran seems to have stopped its weaponization program. But what 
does that mean? The weaponization program could be completed in just a 
year, year and a half. There is no reason for Iran to build the cart if 
they are still breeding the horse. All they have to do is continue to 
create the fissile material and then restart their

[[Page 8285]]

weaponization program even a year or two from now and they will be well 
on target to have a nuclear weapon by the middle of next decade.
  So how do we know that they are developing the fissile material 
technology? Because this is the one thing the whole world agrees on. 
The centrifuges are turning at Natanz. Iran says so. And they brought 
in the IAEA to look at it, and the IAEA says so. And Bush says so. 
Iran's enemies and Iran's friends say so. And we have seen the 
pictures. Iran is creating the technology to enrich uranium and create 
that fissile material.
  Of course, Iran says it is all about generating peaceful electricity. 
Wait a minute. Iran, as we know, creates an awful lot of petroleum. As 
a byproduct of pumping petroleum, you often get natural gas. Iran has 
no way to export that natural gas. That natural gas is a useless 
byproduct. Iran flares the natural gas. Iran flares enough natural gas 
to generate more electricity than you could generate at ten Bushehr-
style reactors. Well, if you have free flared natural gas, that is by 
far the cheapest way to generate electricity. But Iran isn't interested 
so much in generating electricity. They are interested in pursuing 
their nuclear program to create the fissile material which is the most 
essential element of creating a nuclear weapon. So Iran is developing 
the fissile material needed for a bomb.
  Now there are those who say that our response should be a military 
response. They point out that Saddam Hussein's real nuclear program was 
destroyed by Israel in 1981. Saddam put it all in one place, above 
ground, easy to see. Syria made a similar mistake. They put their whole 
program, or the essential elements of that program, all in one place, 
above ground. They tried to make it a little bit more difficult to see. 
And if news reports are to be credited, that program was destroyed late 
last year by an Israeli bombing effort.
  The Iranians are not nearly so incompetent. Their program is 
dispersed. It is underground. And it is hidden from our intelligence 
assets. A military strike would not destroy their whole program. It 
would set them back a few years. It would also cause a number of 
problems. But even if you believe that a military strike is a good 
idea, we ought to first exhaust our nonlethal alternatives if for 
nothing else than out of a decent respect for the opinion of the world.
  I will talk about those nonlethal alternatives in a second. But I 
want to respond to those who take the other approach and say, well, 
shouldn't we pass a law here in Congress to prohibit any bombing of 
Iran's nuclear facilities? That is, I think, a mistake. I call it 
Ambien for Ahmadinejad. It would help him sleep better.
  There is no reason for us to tell the Iranians that we have taken any 
of our options off the table. In fact, the more reasonable Iranian 
leaders will tell their colleagues that one of the reasons to give up 
the nuclear program is that in the end, it may be destroyed by an 
American bombing raid before it bears fruit. So you strengthen the hand 
of the realists in Tehran if you leave all options on the table.
  But now let's focus on those nonlethal options. We have got to get a 
message through to the Iranian elites and the Iranian people. And that 
message is very simple. You face total economic and diplomatic 
isolation unless you verifiably and permanently give up your nuclear 
weapons program. Well, we have the broadcasting resources to get this 
message through. Radio Farda is broadcasting into Iran right now. Why 
can't we get this message through? Because I can't lie that well in 
Farsi. The real facts are that Iran faces nothing close to economic or 
diplomatic isolation if it continues its nuclear program. They face 
only the tiniest sanctions, and they can do business as usual with the 
entire world.
  So what do we do to create the reality so that we can truthfully tell 
the Iranian people and Iranian elites that they must give up their 
nuclear program or they face economic and diplomatic isolation? Well, 
before I go forward, when we talk about the Iranian economy, we must 
recognize that special debt of gratitude we owe to Iran's mullahs whose 
mismanagement, corruption and oppression have made Tehran vulnerable to 
economic pressure even in a $130-a-barrel world. So what do we do?
  What have we done? First on the economic side, and then on the 
diplomatic side. Now there was great fanfare on October 21 of last year 
when we announced big sanctions on Iran until you realized there was 
virtually nothing there. The first part of that sanction was to ban 
four Iranian banks. We had banned some of them earlier, bringing to a 
total of four the number of Iranian banks that were not allowed to 
execute transactions with the New York branch of the United States 
Federal Reserve. That means large dollar transactions, including oil 
sales, will either have to be executed through other Iranian banks or 
through non-Iranian banks or priced in euros rather than dollars. The 
most this could possibly do is to cut maybe one-tenth of 1 percent of 
Iran's oil revenue at very worst. And that is if many of the European 
banks really hit them with huge fees.
  The fact is that there are plenty of banking channels. Iran can 
easily shift, and has shifted, to selling its oil for dollars. Instead 
it sells for Euros. And there are many ways that they can do dollar 
transactions if they want to. We have not taken the step of even 
banning all Iranian banks from doing business with the Federal Reserve 
Board because we have been unwilling to inconvenience international 
corporations even in that slight way.
  We also announced rather recently that we would put the Iranian 
Revolutionary Guard Corps on the terrorist list. And for a few hours, 
people said what does that mean? Does that mean that if Mercedes 
chooses to sell trucks to the Iranian Revolutionary Guard Corps that 
the United States might shut down Mercedes operations in the United 
States? Two hours later, the Treasury issued a press release saying 
they had no intention of pursuing secondary sanctions. What that means 
is that every European company is free to do business with the Iranian 
Revolutionary Guard Corps any way they want without facing any 
consequences in the United States.
  So what should we be doing? The good news and the bad news is that we 
have a lot of tools in our economic toolbox. The good news is we have 
got tools in the toolbox. The bad news is we have known of this threat 
for a decade, and we have left our tools in the toolbox, except for, 
you know, a little screwdriver we have used to have the slightest 
possible effect.

                              {time}  1915

  The first thing we should do is follow the law. We should enforce the 
Iran Sanctions Act. Now, the Iran Sanctions Act was formerly known as 
the Iran-Libya Sanctions Act.
  We used the sanctions against Libya, we forced Qaddafi to change his 
behavior, he gave up his nuclear program, we dropped Libya from the 
act, we renamed the act, and we resumed our policy of never applying it 
against Iran.
  Since 1998, despite overwhelming evidence, we haven't taken the first 
step we are supposed to take under the Iran Sanctions Act, but what are 
we supposed to do? The purpose of the act is to deter companies from 
investing $20 million or more in the Iran oil sector.
  The first step in that is for us to take note of which companies have 
invested $20 million in the Iran oil sector, and that triggers the act. 
At that point, the President is supposed to impose sanctions on that 
firm or at least name them and shame them and then waive the sanctions. 
Minimum compliance with the law requires the President to at least name 
the companies that we know are investing $20 million or more in the 
Iran oil sector.
  What has actually happened? The State Department, the Administration, 
refuses to open its copy of the Wall Street Journal on any day in which 
there is an announcement of an additional significant investment in the 
Iran oil sector.
  I had to turn to CRS, the Congressional Research Service, to give me 
a chart of all of the large investments being made in the Iran oil 
sector. We

[[Page 8286]]

have got not just one chart, we have got another chart. But if you ask 
the State Department to name even one company that is investing, they 
will say we refuse to speak. Why? Because they don't even want to 
acknowledge that the investment is being made. That would trigger the 
act.
  This is like hiring a police officer who disagrees with the law, a 
narcotics officer who just walks around and everybody is using whatever 
drugs, and this officer does nothing--what good is to pass the law if 
the Executive Branch refuses to apply it?
  Now, we have a bill that has passed this House, it's stymied by 
Republicans in the Senate, it is opposed by the Administration, it's 
called the Iran Counter-Proliferation Act. What does this legislation 
do? The legislation strengthens the Iran Sanctions Act, it imposes a 
total embargo on imports to the United States of Iran's goods.
  Believe it or not, we import from Iran. We don't import oil, we only 
import the stuff they don't need and they would have trouble selling 
anywhere else, caviar and carpets, et cetera.
  The bill we would pass through this House would at least turn to Iran 
and say well you can't sell those goods here in the United States, 
which would have a significant impact on some of the most powerful 
families and clans in Iran, particularly those that play a decisive 
role in their government.
  The Iran Counter-Proliferation Act would also end the obscene 
practice of U.S. oil companies doing business with Iran through their 
foreign subsidiaries. So far that bill remains bottled up, in large 
part because the Administration opposes it. The same Administration 
that refuses to enforce the existing law.
  What about the World Bank? The World Bank has lent some $1.36 billion 
to Iran since Iran began its nuclear weapons program. Some $700 million 
of that hasn't been disbursed yet, but the United States has done 
nothing to prevent those loans from being authorized or the funds 
disbursed, except one thing.
  The Administration cast a token vote at the World Bank knowing they 
would be outvoted, and they only did that because it was required by 
law. At least they followed the law. They are willing to follow the law 
when it's utterly inconsequential.
  To date, the Secretary of the Treasury has refused to even call any 
of his counterparts in European capitals to urge them to withdraw their 
support for these World Bank loans.
  Now, why are these World Bank loans so important? Because we know 
what it takes to stay in power. One of the things it takes is 
delivering projects to people, bringing home the bacon, if you will. 
Now, I know it's not kosher, it's not Halal, but it is what Iranian 
politicians around the world do. Imagine what it is for them to cut the 
ribbon on a water project and say we have given this to you. That's 
enough to help them stay in power just a little bit. But imagine how 
much more meaningful it is when they say the whole world, the World 
Bank, has sent us this money. This is proof that the United States can 
do nothing to hurt us. This is proof that the whole world is on our 
side about developing nuclear weapons.
  The World Bank loans to Iran are harmful not just from an economic 
perspective, they are harmful to us from a political perspective as 
well. We should change our laws dealing with Federal procurement, State 
procurement and Federal corporate assistance to achieve one thing. We 
should turn to any corporation seeking a big contract with the Federal 
Government or seeking the assistance of any of our programs designed to 
help business, whether it be the Export-Import Bank or a whole host of 
other programs.
  We should ask the other question, does your corporation or any of its 
affiliates invest in the Iran oil sector, loan money to the Iranian 
government, sell munitions to the Iranian government? Imagine the 
effect this will have if we make it clear that if you are a Nebraska 
corporation owned by an Italian corporation, and the Italian 
corporation is investing in the oil sector of Iran, that means we are 
not going to give you the contract, we will give it to somebody else.
  A number of States have tried to do this, and they have been 
threatened by the Federal Government. We have passed through this 
House, and it has made it through the Foreign Relations Committee in 
the Senate, a bill dealing with OPIC, the most unfortunately titled 
Federal agency, the Overseas Private Investment Corporation, and said 
that if you want the assistance of this agency, you have to certify 
that neither your corporation nor any of its affiliates are engaging in 
those wrongful transactions with the Iranian government. Clearly, we 
should not be giving assistance to those who are aiding Iran's nuclear 
program or aiding the Iranian government in one of the key pressure 
point areas, munitions, investment in the oil sector, loans to the 
government.
  Now we have the issue of divestiture. We need to encourage private 
investors and government pension plans and private pension plans to 
sell their stock in corporations that are engaging in those 
transactions with the Iranian government, investments in the oil 
sector, loans to the government, sale of munitions.
  A number of States, especially the State of Florida, my own State of 
California, have decided to divest from such companies. But when they 
do so, they face frivolous lawsuits, lawsuits from people saying, ``oh, 
you have to invest for the maximum possible return, and you can't think 
of national interest when you do so.''
  Now, get this, because my colleagues have seen how the Administration 
has been opposed to frivolous lawsuits and any lawsuit they claim is 
frivolous, they have been against lawsuits on everything except one 
thing, they are in favor of frivolous lawsuits against State 
governments who choose to divest, against private pension plans that 
choose to divest. Why? Because their hatred of trial lawyers is 
exceeded by their hatred of investors who would try to influence the 
very companies in which they have made an investment.
  It is absolutely shameful for us to make it more difficult for good 
Americans to push the companies that they partially own into doing the 
right thing. We should go further.
  Later this month, I will introduce legislation to change our tax code 
so that those who are divesting from companies doing business in those 
bad areas, as I have identified, or those areas we would like to 
discourage with regard to Iran, we will say, if you sell your stock in 
such a company, and reinvest the proceeds in a company that is clean, 
then you should get a carryover basis. We are not going to use that as 
a taxable event, because divestiture should be encouraged, not taxed. 
We need to turn to all the corporations in the world and say do not 
invest in the Iran oil sector, do not lend money to that government, do 
not sell the munitions, otherwise, we will encourage our companies, we 
will encourage our investors, we will encourage our pension plans, we 
will encourage our individual investors to stop investing in your 
company. We will not give aid to any of your subsidiaries, and we will 
not make them eligible for Federal contracts. This will provide real 
pressure on the Iranian government.
  But that's just the economic toolbox. We also have the diplomatic 
toolbox as well. It is even more powerful, it is even less used. We 
have never offered Russia anything in return for real cooperation on 
the issue of Iran's nuclear program. We have not provided linkage 
between issues Russia cares about and what we care about, which ought 
to be preventing Iran from developing nuclear weapons.
  We have made it clear to Russia that what we do with regard to 
Chechnya, Abkhazia, Moldova, Estonia or anything else is not linked to 
what Russia does with regard to Iran.
  Likewise, we have made it clear to China that what we do with regard 
to Taiwan or currency manipulation or trade will have nothing to do 
with what China does in the U.N. or elsewhere with regard to Iran's 
nuclear program.
  If we could get Russia and China to support us at the U.N., then 
instead of stupid little sanctions designed to fool people around the 
world, we could get

[[Page 8287]]

real U.N. sanctions. What would that mean? Imagine a U.N. ban on 
sending refined oil products into Iran. Now, Iran has plenty of 
petroleum, but they don't have the refinery capacity. They import 
nearly half of the gasoline they burn.
  If the United Nations would prohibit every country in the world from 
sending them that refined petroleum, you would have an immediate impact 
on the streets of Tehran. You would be able then to turn to the Iranian 
people, to turn to the Iranian elites and say that you, indeed, face 
economic and diplomatic isolation unless you abandon your nuclear 
weapons program.
  We need to prioritize. We need to link what is important to us to 
what is important to others. We need to use all the tools in our 
toolbox, and we need to use them immediately. Otherwise, we will not 
achieve the level of security from nuclear attack that the American 
people deserve.
  I am not saying that we can make America invulnerable, but I am 
saying that it is our duty here in the Federal Government and as 
foreign policymakers to do everything we can to achieve that objective.
  I have concluded. I did mention that I would perhaps talk about 
threats that face us in the second and third quarters of the 21st 
century. I will leave that to another speech. I yield back.

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