Iran’s Global Ambition

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About the speaker

Dr. Ilan Berman is Senior Vice President of the American Foreign Policy Council in Washington, DC. An expert on regional security in the Middle East, Central Asia, and the Russian Federation, he has consulted for both the U.S. Central Intelligence Agency and the U.S. Department of Defense, and provided assistance on foreign policy and national security issues to a range of governmental agencies and congressional offices. He has been called one of America’s “leading experts on the Middle East and Iran” by CNN.

Mr. Berman is a member of the Associated Faculty at Missouri State University’s Department of Defense and Strategic Studies. A frequent writer and commentator, he has written for the Wall Street Journal, Foreign Affairs, the New York Times, Foreign Policy, the Washington Post and USA Today, among many other publications.

Mr. Berman is the editor of four books – Dismantling Tyranny: Transitioning Beyond Totalitarian Regimes(Rowman & Littlefield, 2005), co-edited with J. Michael Waller Taking on Tehran: Strategies for Confronting the Islamic Republic (Rowman & Littlefield, 2007), and Iran’s Strategic Penetration of Latin America (Lexington Books, 2015), co-edited with Joseph Humire, and most recently, T he Logic of Irregular War: Asymmetry and America’s Adversaries (Rowman & Littlefield, 2017) – and the author of four others: Tehran Rising: Iran’s Challenge to the United States (Rowman & Littlefield, 2005), Winning the Long War: Retaking the Offensive Against Radical Islam (Rowman & Littlefield, 2009), Implosion: The End of Russia and What It Means for America (Regnery Publishing, 2013), and Iran’s Deadly Ambition: The Islamic Republic’s Quest for Global Power (Encounter Books, 2015).

Transcript

Introduction

Robert R. Reilly:

Our speaker tonight, Ilan Berman, I am happy to say is a former colleague. I have had the privilege over the years on and off to serve as a Senior Fellow at the American Foreign Policy Council of which Ilan Berman has been the Vice President for quite, quite some time.

He is a very well-known expert on national security in the Middle East, Central Asia, and the Russian Federation and he has consulted widely with the CIA, Defense Department, and other agencies. He is a member of the Associated Faculty at Missouri State University’s Department of Defense and Strategic Studies. He is a prolific writer. He is a columnist at Forbes and The Washington Times and he serves as editor of the Journal of International Security Affairs.

Just to give you a little sample. On March 1 in Forbes- no, sorry, USA Today, you have so many venues it is hard to keep up, titled, “Iranian,” quote unquote, “Moderate Victory Anything But.” Also on March 1, U.S. News and World Report, an “Ominous Election in Iran.” Less than a week before that, “Iran’s Eurasian Adventure,” Foreign Affairs [Magazine], et cetera.

Now, Ilan has edited several books and written four himself, including Tehran Rising: Iran’s challenge to the United States, Winning the Long War: Retaking the Offensive Against Radical Islam. One of his areas of expertise is public diplomacy and the war of ideas. Implosion: The End of Russia and What It Means for America, that was fairly recent, 2013, Regnery Publishing, and the book on which we are meeting today, Iran’s Deadly Ambition: The Islamic Republic’s Quest for Global Power. Please join me in welcoming Professor Berman.

This is the book. It is available for sale and for Ilan to sign for you after the talk.

Ilan Berman:

Thank you.

Robert R. Reilly:

Thank you.

Ilan Berman:

And by the way, feel totally free to reserve judgment about whether or not you want to buy the book. I think it is important to know what I am selling before you buy it. Thank you, Bob. This is wonderful.

I gave a book talk on my Russia book a couple years ago here. It is always nice to be back. It is always nice to see a lot of old friends and friendly faces. And I see a couple of bona fide Iran experts in the audience, so I am going to have to mind my Ps and Qs as I go through this, but I think I am going to be okay.

So I am a recovering lawyer. It is a lifelong process, but it requires me to say that everything Bob said is correct, but I do not represent the views of the government. I represent the private, nonprofit institute called the American Foreign Policy Council. We were privileged to have Bob as one of our senior fellows before he moved on to bigger and better things, but the lawyer in me is compelled to say that if the agencies that I have consulted for actually listened to me, we might be having a somewhat different conversation, but what you hear [is my opinion].

My office is on the Hill. We have a nice shiny townhouse on Capitol Hill, and from that vantage point, what I get to hear if not an insider’s perspective, it is at least an informed outsider’s perspective. You know, I spend a lot of time working with the military. I spend a lot of time working with congressional offices on these issues, on Russia, on radical Islam, and on Iran and it is amazing how much information is still lost sort of in that conversation that is happening on Capitol Hill.

We Do Not Understand Iran

So let me start here. There is sort of a little bit to unpack, but let me start with something that is a somewhat provocative contention, which is that we do not understand Iran, and in diplomatic parlance, Iran is far more sophisticated than we are. The reason for that is that, well, I mean we are now in what Americans call the silly season, right, deep in the heart of the political primaries, but generally speaking, when we have a Chief Executive, the Executive says what he means, we think, and one hopes [he] means what he says, and it tends to be a unitary message that is conveyed to both domestic audiences and to international audiences and Iran is not like that.

Iran Speaks in Many Voices

We do not understand Iran because while we speak in one diplomatic voice, the Iranians speak in many, right? I will give you an example of what I mean. The last two years have seen the mainstream media and the Obama administration fixate overwhelmingly on this language of pragmatic arms control coming out of the Iranian regime, right, the idea that the nuclear deal is a possible commercial transaction, it is a pragmatic transaction. It is one that is going to leave the United States better off. It is one in which the Iranians are willing to give up things that they really care about and they seem eminently reasonable and, you know, this is sort of a horse-trading exercise.

Iran Looks Pragmatic and Ready to Do Business

The Iranian regime as a result looks very pragmatic. It looks like a government as you have heard the administration officials talk about a great deal, a government that you can do business with. Hear the interlocutors are important. It is not a coincidence that the people that the Iranian regime rules out as the voice peace, voice boxes of this pragmatic dialogue, our people who wear nice suits and they speak English, and they are the darlings of Columbia University or what have you because that is the image that is one side of the face the Iranians are trying to show. They are trying to show that we can actually trust them, and we can do business with them. But that is not the sum total of what Iran is saying because as Iran is pragmatically, or appears to be pragmatically, talking to us, the language that they are speaking in to the Muslim world is entirely different, alright?

Iran Speaks in Pan-Islamic Terms

On one level, they are talking in pan-Islamic terms. They are talking about Iran as the natural inheritor of the Islamic Ummah, the community of the faithful, Iranian ideological competition with Saudi Arabia, right? I would not say their near peer, but certainly their ideological rival across the sectarian line in the Sunni world. It is a struggle for ideological primacy. But it is one that has very, very clearly animated what Iran has done in the Gulf, what it, Iran, is doing now in places like Yemen and Syria. And it is a very real narrative, and it is a narrative that as a result of the nuclear deal is gaining currency.

Iran Speaks in Shiite Sectarian Terms

You also see them talking in Shiite sectarian terms when the Iranians talk to Yemen’s Houthis, when they talk to the Alawites in Syria, when they talk to Iraq’s Shiite militias, they are talking about- so within that ideological competition between Sunnis and Shiites and they are trying to empower their own team, right? They are trying to empower the Shiite sectarian portion of the conversation. And they are also simultaneously speaking in a language that is not religious at all. They are speaking in the language of third world populism.

The best example of this is Mahmoud Ahmadinejad when he was President of Iran, would come every September to New York to give a speech at the UN General Assembly. We tend to remember those speeches from sort of for all of the memorable lines that he says right? He saw a halo going around him. The Prophet Muhammad imbued him with divine wisdom and the audience sat rapt with attention, right? And this is sort of what makes the headlines.

But if you actually read his speeches, he spends very little lip service on religious ideas. He is talking like a third world populist. He is talking like a Marxist. He is talking about a new world order in which the disadvantaged of the world should band together against the prevailing dominant powers, i.e., us and the Europeans. This is the narrative that has carried a lot of currency in Iran’s relations with countries like Venezuela, for example, or Bolivia, and that is a language that is animating diplomacy even today, right?

Iran is a Revisionist Power

So the Iranians simultaneously are speaking in all of these different registers, even though we are only hearing one, and what Iran says in those other voices is very different, but it is no less important. In fact, I would argue it is more important than what it says in the one that we are hearing because the Iranians have a definite, defined idea of manifest destiny. Iran is not a status quo power. Iran is a revisionist power.

The best way to think about Iran… Henry Kissinger a few years ago in an interview with The Financial Times talked about how Iran ultimately will have to choose between being a country and a cause. Right? First of all, I do not believe that contention at all. I think Iran is doing really well not having to choose between being a country and a cause.

But it is a good way to think about Iran. Iran is a revolutionary movement with borders, and it is a revolutionary movement that is inexorably based upon their foundational documents, based upon the Ayatollah Khomeini’s seminal book, Islamic Government, based upon the Iranian Constitution, is expanding outward if it can, right? And so you see this manifest destiny that animates what the Iranians would like to be, a global hegemony, right?

Iran’s Ambitions are Global

And the reason I titled my book Iran’s Global Ambition is because the ambition is truly global. I think you can make a credible case that their reach is not quite global yet, or at least is not fully global, but it is getting there. And, in fact, the nuclear deal is one of the ways it will get there, but certainly, the ambition is global. And you see this playing out in multiple theaters over the last decade or so.

In the Middle East, the Iranians try to co-opt, and did a fairly successful job of trying to co-opt the narrative of the Arab Spring over the last half decade. Iranian officials talked a great deal about how the Arab Spring was the belated realization of Khomeini’s idea of Islamic revolution around the region, right? I mean it is only a quarter century late, better late than never. The Iranians try to create mini-Islamic revolutions in places like Bahrain, unsuccessfully. They tried to subvert the caretaker government in Egypt, unsuccessfully. But those were learning experiences. Those were early efforts.

Iran is Propping Up Assad in Syria

As you move further in time closer to where we are now, the Iranians become much savvier. They become much more successful. And what this looks like is Iran is propping up of the Assad regime in Syria, right? To the tune of $6 billion a year even while Iran was under sanctions. You see Iran propping up the Shiite insurgency in the southern Gulf state of Yemen, right? Empowering the Houthi rebellion to the point where the Houthi rebellion has taken de facto control of the country and doing so to the tune of multiple billions of dollars a year while it is under sanctions.

Iran is Moving into Venezuela

And beyond that, I mentioned Venezuela. I think Latin America is a really good contrasting example because it is an area that is close to here. It is an area that sort of people do not think about when they think about Iranian ambitions, but it is a place, a fear, the Iranians are very clearly moving around in a way that is detrimental to U.S. interests.

Venezuela tends to be the country that we think about when we think about Iran’s entry into the Western Hemisphere, but Venezuela needs to be understood as a gateway, right? The very close personal bonds between Mahmoud Ahmadinejad and Hugo Chavez when he, Chavez, was alive were not the end of the story, they were the start of a very systematic Iranian entry into the region that manifested itself in Iran insinuating itself into the economies of the region, building much closer diplomatic and strategic ties to the countries of the ALPA, the poor man’s NATO for Latin America, known as the Bolivarian Alliance of the Americas, and building very close ideological ties to ideological leftist regimes like that of Evo Morales in Bolivia, like that of Rafael Correa in Ecuador. But most importantly, with that entry, with that economic entry and then ideological entry, Iran also builds a strategic capability.

Iran Uses Latin America to Attack the United States

The Saudi Ambassador Assassination Plot

And so here is a little takeaway that most people do not know. Over the last decade, Iran has tried to use Latin America as a platform to carry out at least three terrorist attacks on the United States in the U.S. homeland, right? You guys know one, of course, you know of the botched attempt to use the Los Zetas drug cartel, drug and crime cartel, to assassinate the Saudi Ambassador to Washington here in town, here at Cafe Milan. That was a botched operation, but from every law enforcement official that I have talked to, that was a real operation. There was money transferred from Iranian accounts to the accounts of a middleman, an Iranian American used car salesman. Perhaps not the best agent, but that is a real plot that would have culminated in a terrorist attack of fairly significant scope.

Iran was Involved in the 2007 JFK Airport Plot

The one that was even bigger was one that most people do not know about, which was the 2007 attempt by a Guyanese national that had been recruited by Iran as part of the clandestine network in Latin America, his name was Abdul Kadir, to bomb the fuel tanks underneath JFK Airport. Abdul Kadir was apprehended, the plot was foiled, he was tried in the Southern District of New York. He is now serving a life sentence in New York. But, if you ask law enforcement officials about this plot, they would say that had it been carried out, it would have been comparable in size and scope to September 11th.

The 2011 Iranian-Venezuelan Cyber Attack

And the third, which is a little bit more amorphous, but I think still worthy of consideration, is the fact that Iranian diplomats, working with Venezuelan diplomats, actually attempted to carry out a program of cyber-attacks against U.S. installations, both civilian and military, including nuclear power plants in the fall of 2011. That plot was foiled. The Venezuelan diplomat in question was actually ‘p-and-g’d,’ was declared persona non-grata and kicked out of the country.

But it was a real thing, and what this shows you is that the conversation that a lot of people have about Iran being a solely Middle Eastern problem, as in it is over there and no matter how troublesome it is, it is confined in its activities to being overseas and it does not affect the U.S. homeland is frankly, false. It is false because Iran’s ambition is global, and increasingly its reach is global as well.

And here I think it is necessary to talk about the nuclear deal and sort of what it has actually done. So all of you I am sure have read ad nauseam about the nuclear deal, and I do not know how many of you are lawyers, but if you are a lawyer, you have this strange compulsion to actually read the text of the agreement. It is a silly thing. A lot of our elected officials do not do that, but if you have read 159 pages of the JCPOA – and by the way, it is an enormously effective cure for insomnia if you need it. Really, it is spectacular, but if you do, you will find that like all good lawyers, they stuck all the good stuff at the back.

Deficiencies of the Iran Deal

The Deal Does Not Roll Back Iran’s Nuclear Program

So the nuclear deal is deficient, materially deficient as we lawyers say, on three major grounds. First of all, the nuclear deal does not roll back Iran’s nuclear program, alright? It is time limited, it only lasts for a decade, and the narrative propounded by the White House was that the nuclear deal would irrevocably sort of dismantle Iran’s nuclear infrastructure, but the actual text says exactly the opposite. If you go to the back of the document, you look at annex one, annex three, annex four, you will see provisions that cumulatively strengthen Iran’s ability to develop plutonium processes, the ability to safeguard its nuclear facilities against airborne attack, for example, from Israel or what have you.

The end result is a slower Iranian nuclear program, but it is a stronger Iranian nuclear program over time. Iran increases the maturity of its nuclear program over the coming decade and it will be closer to nuclear breakout capability when the deal tolls a decade from now.

The Deal Focuses on Building, not Buying, Nuclear Capability

The president spent a lot of time talking about how the nuclear deal shuts off all pathways by which Iran can acquire nuclear capability. This sounds awesome, but it is not true, and it is not true because, well, frankly, if you want to get right down to it, there are only two ways by which a country can get a nuclear capability, it can build one or it can buy one. And the nuclear deal overwhelmingly focuses on the build component of the conversation. It focuses on Iran’s indigenous nuclear development. It does provide greater oversight over select nuclear facilities, but what it does not do is it does not address in any meaningful way the potential for Iran to carry out clandestine procurement of nuclear capabilities from abroad, nuclear components, nuclear know-how.

I do not think it does for this audience, but for some audiences it may sound far-fetched, but let me remind you that the nuclear-capable missile known as the Shahab-3, it is the one the Iranians roll out, you have all seen it on TV, it is the one they roll out, it usually has ‘Death to America’ written on the side or ‘Death to Israel’ (it is interchangeable, right?), that is actually not an Iranian missile. I mean it is now, but it used to be a North Korean missile called Nodong-1, and before that it was a Chinese missile called the CSS-2.

It is a long way of saying that there is nothing new under the sun. What you are looking at is a long-established pattern of cooperation between Iran and foreign suppliers, most clearly North Korea because North Korea is strapped for cash, and they have a very robust nuclear ballistic missile conversation ongoing with the Iranians. The North Koreans have carried out over the last decade four nuclear tests and there were Iranian scientists present at every single test. That it is not an accident, it is because they are talking, and they are learning.

But the Iranians also have a strategic conversation ongoing with, for example, private suppliers of nuclear technology in places like China, which makes that clandestine pathway, while it is still open, a very significant danger. It is one that the intelligence community is increasingly focusing on. And again, here we have capabilities that will mitigate against catastrophic acquisition, rapid near-term acquisition, but there are serious concerns, certainly among the people that I talk to, about us not having eyes on everything that the Iranians are doing in terms of clandestine work, that is a real concern.

Multiple Marshall Plans for Iran

But the most important deficiency, I think, is that the nuclear deal violates the first rule of ditch digging. You guys all know the first goal of ditch digging, right? If you are in a ditch, stop digging. In a more refined audience like this one, I would say it violates the Hippocratic oath, which is that diplomacy like medicine should do no harm, but in fact the nuclear deal enriches Iran on an almost unimaginable scope.

I work for a non-profit, Bob knows, so I have no idea what a hundred billion dollars looks like. I do not, I have no idea, but I do know what it looks like to Iran. In 2014, Iran’s annual GDP was $415 billion dollars, so what you are looking at is a delivering of cash equivalent to roughly a quarter of Iran’s annual economy.

Iran Will Finance More Terrorism

Over the summer, I made this case. I was asked to testify before the House Financial Services Committee’s Task Force on Terror Financing, and I made this case. And I, in passing, made the remark on the panel that this is a Marshall Plan for Iran, which by the way, I said because it sounds really cool, and so the opposition witness jumped down my throat and said it is not a Marshall Plan, what are you talking about?

So I got curious, so after the hearing, I actually did some historical research, so here is a little historical fact. The Marshall Plan, which was formerly known as the European Recovery Program, was launched in 1948 by Harry Truman. The intended recipients were 17 different countries in Europe, which over the course of four years, four years, received the equivalent in today’s dollars of $120 billion dollars.

So my co-panelist was absolutely right. This is not a Marshall Plan for Iran here. This is many Marshall Plans for Iran. This is much worse than it sounds, and by the way, this is not money that is entirely free, it is not our taxpayer money, it is not money that is entirely unencumbered, but I think it is naïve in the extreme to assume that Iran will use a cash gift of this sort for one select purpose, which is what the White House says.

The White House says Iranians will use this money overwhelmingly for domestic development and reconstruction. You know what, I am sure they will, but here is the thing, economies of scale being what they are, the U.S. economy last year was $16.7 trillion dollars, so the equivalent amount would be as if the United States received access to $4.2 trillion extra dollars in the near term, almost immediately.

So what does that mean? If somebody were to tell you that America just received a gift of $4 trillion dollars, and America is only going to use it for one select thing, you would say that is absolutely not true, America will use it for everything because the cash gift is so large that it obviates the need for Iran to make hard choices. And that, I think, is the fundamental flaw of the deal.

Even so, even if that money is somewhat encumbered because Iran has some debts – by the way, the Iranians never in the history of the Islamic Republic have paid off all their debts at any given time, and when you have the Europeans and the Chinese looking at the Iranian market as a three-course meal, they are very unlikely to stand on ceremony and require Iran to carry a full debt repayment before they make new deals, it is not how they do business.

But even if there is money that is encumbered from that $100 billion dollars, you are still looking at a massive tranche of cash. To wit, you can already see how Iran is beginning to change its behavior in order to accommodate this increased cashflow.

So the month after the deal was signed, Senator Mark Kirk of Illinois asked the Congressional Research Service to estimate for him how much money Iran is spending annually on support for terrorism, and what he got back from the open-source study was not a number but a range, it was between $4 billion, roughly, and $16 billion dollars annually. That is a huge range, and the way they broke it out was they said it depends if you count into that aggregate total these $6 billion dollars a year that Iran spends on the Syrian war, the Syrian civil war. It depends on whether you count Iran’s multi-billion-dollar offsets to Yemen’s Houthis as part of the total, or if you just classify it narrowly as Iranian support for Hamas, Iranian support for Hezbollah, and assorted Shiite militias. But you can understand how they came up with this total.

I am not a mathematician. I am in the process with my son of flunking seventh grade Common Core math, so I was not good at it the first time, it is much harder the second time, I will not lie, but even I can figure out that if Iran spends just 10 percent of this cash infusion on the support of terrorism, you are looking at a doubling or a trebling of Iran’s terrorism budget, so if you like what Iran is doing now, just wait because statistically speaking, Iran is not going to have difficulty expanding dramatically the scope of its activities.

In fact, there are terrorist groups that are planning precisely that. If you are like me and you read strange papers in the Middle East, you will find that the officials of a small Palestinian terrorist group called the Palestinian Islamic Jihad, which is a wholly owned subsidiary of the Islamic Republic, have actually been traveling all over the Gulf and to places like Egypt, trying to acquire parts, which seems funny because the last time I looked, the Palestinian Islamic Jihad did not have a lot of money to spend on buying arms from foreign sources, except they think they do, and the reason they think they do is because they are anticipating that there will be a trickle-down effect from Iran’s newfound largesse in a way that is going to be, I think, very dangerous.

You know who else is expecting this? The Israelis are expecting this. I was in Israel in the Fall, and what the Israelis would tell you is they are facing down the barrel at an economic war of attrition. What they are looking at is a situation where in the near term they are facing a growing threat of quantity, not of quality, but of quantity, meaning the number of missiles that Hamas has, the number of rockets that Hezbollah has, is likely to increase as their coffers increases, as Iran’s gifts become more generous.

And that means that Israel has to spend more and more money to maintain the same level of security, which is why, if you guys have been paying attention, the last several months have seen Israeli officials come with repeated frequency, or increasing frequency, to Capitol Hill to lobby for additional offsets, for missile defense, for example, and they are going to be doing it in the Spring again. It is because they see themselves about to be locked into this cycle where they need to be spending more and more money to maintain the same level of security. It is not a very beneficial cycle at all.

And when the president seems to be a nicer guy like Hasan Rouhani, we say, well, oh no he is completing a deal with us, but if it is true that the Supreme Leader has all the power, and the President has none of the power five years ago, it is also true today. Michael Ledeen, the great scholar of Iran, always says that the way you know who is in charge is because his name actually says that he is in charge, the Supreme Leader, which I think is actually a really useful tool.

But the Supreme Leader announced the Islamic Republic’s Sixth Development Plan, so like all good authoritarian regimes, they have a long-term plan for development. This is their sixth development plan, sixth five-year plan, and that plan envisions an increase of the national military budget by $5 billion dollars to five percent of GDP. This was two weeks before the signing of the deal while Iran was still under sanctions.

So let me ask a question. Where do they think this money is going to come from? It was going to come from diplomacy. They were banking against future returns, and you know who is benefiting from that banking now? The Russians are benefitting from that banking now. The Iranians just concluded $8 billion dollars worth of arms deals with the Russians. Russia is the supplier of choice for Iran’s military modernization effort. And you see a whole series of permutations like this that are beginning to coalesce, which leads you to the principal contention.

And this would all be acceptable maybe if you actually believe, as the president apparently does, that this is a vehicle for Iran to turn over a new diplomatic leaf. What does it matter how much money Iran spends on the military if Iran is now our friend? So the question really is: is there a peaceful dividend from the nuclear deal?

I would never say this three weeks out, four weeks out even though I had my suspicions. We are now seven months out from the nuclear deal, so I think you can pretty powerfully say that Iranian behavior has actually become much worse after the deal than it was before. The Iranians have locked themselves and locked us into this cycle of provocations. They escalated their Cold War with the Saudis. They have carried out multiple ballistic missile tests in violation of UN resolutions. Why? Because they do not think anybody is going to enforce them. I think they are correct. They have carried out very brazen seizure of American sailors.

By the way, the Iranians, like the Russians, have perfected the art of being both arsonist and firefighters. The Iranians are very good at solving problems which they created. They are now calling themselves the solution, so it is only with a little bit of irony that I look at our Secretary of State thanking them for solving a problem that they themselves created, and worried that he might not be understanding the dynamics of the problem, but that is precisely it.

And this is the pattern of behavior that you see coloring those dynamics that we have seen over the last week or so in those articles I wrote about the Iranian election. The mainstream media, if you read the BBC, the Associated Press, The New York Times, what have you, you might be convinced that Iran has just had a Persian Spring, that reformists rule the day and we now see a new moderate face. If you believe that, I have a bridge to sell because you just have to look at the numbers to understand how flawed this analysis is.

There are 290 seats in Iran’s unicameral parliament, known as the Majles. There were 6,000 candidates for the Majles that were approved by the Guardian Council to stand for the Majles, but initially, there were 12,000, and 6,000 of those candidates were disavowed or disqualified by the clerical powers that be, so what you end up with is a carefully curated list that dictates that no matter who wins, it will be okay with the Supreme Leader. They are within the Jersey barriers of the ideological line that is approved by the regime.

The same holds true for the Assembly of Experts, the clerical body that oversees the functioning of the Office of the Supreme Leader. Four fifths of the the candidates that initially petitioned to apply for a seat were disqualified, and by the way, ironically enough, Khomeini’s own grandson was not deemed Khomeinist enough to stand for the Assembly of Experts. This tells you something about the ideological rigor that exists.

And I would actually make the case that that ideological rigor is going to get worse over time because the nuclear deal has done two things, I think, that are very dangerous for the Iranian polity. The first is they have shored up the legitimacy of the Islamic Republic because as seen from Tehran, from the Iranian Street, the Iranian regime two years ago was very rickety in terms of its political standing. We had succeeded in cratering the Iranian national currency, the riyal. Unemployment [and] inflation were rampant. The Iranian regime was heading towards a very, very grim economic future.

Fast-forward two years, and the Iranian regime has just had an unprecedented economic windfall and has done so on diplomatic terms that even if our administration does not understand, their [administration] certainly does, are overwhelmingly favorable to the Islamic Republic, and so as a result, you see an increasingly nationalist line among conservatives and among reformists in the Iranian body politic, because everyone loves a winner, and it looks like their regime’s win. So there is a lot of nationalist pride. There is a lot more rally around the flag effect than you would expect.

The second is that there is a lot more brewing anti-Western [sentiment], and you see this. The fundamental contention of the White House was that the nuclear deal will be the start of a transformation, it will be the crux of a reset of relations that will bring Iran closer to the West. In fact, if you look at the recent polling in Iran, nothing like that happened. In fact, anti-Western [sentiment] has remained unchanged, and it sort of puts a lie to this idea that this deal will leave a vehicle for us to sort of reconcile with Iran.

In fact, I think the nuclear deal makes it more difficult because if you go back and you look at the trendlines in Iranian society, whatever their historic grievances with the United States and to a lesser extent with Europe, and there are many, dating all the way back to the CIA-instigated overthrow of Mohamed Mossadegh in 1953, the Iranians consistently look to us for leadership and for [us] to be a champion against their regime, to champion their rights against their regime.

There is a reason why the Green Movement, when it coalesced in 2009, spent a lot of time tweeting and talking in English. It is because they wanted us to notice. We did not [notice it], but they wanted us to notice. Now, the nuclear deal has created this interesting paradigm where it looks like all the world, like the United States and its partners in the p5 plus one, have unilaterally ceded their concerns about Iran’s domestic conduct without any meaningful change in what the regime is actually doing.

So it looks like we have sold the Iranians down the river for a chance to talk to the government that is repressing them, and it has created, I think, a very detrimental dynamic in which the Iranians are increasing nationalist, on the one hand, and increasingly anti-American on the other, and that overlays the elections that happened. So believe the reformist rhetoric if you will, but I think over time you are going to see it proven out that the Iranians are more and more anti-Western and more and more conservative.

They are also more and more ambitious.

Iran, I think, has a lot of reason to believe right now that the world is going its way, so I want to read to you guys a quote from the guy who is actually in charge of Iran, the Supreme Leader, from two years ago. In September 2014, Supreme Leader Ali Khamenei addressed the Assembly of Experts, this is the regime’s premier religious supervisory body, and he said that the existing system was, quote, “in the process of change and a new order is being formed. These changes are a mortal blow to the West and,” quote, “The power of the West on their two foundations — values and thoughts and the political and military — have become shaky” and can be subverted.

This is what the Iranian regime believed ideologically while it was still under sanctions, while it was still constrained, while it was still isolated from the international markets, while our sanctions were still working. The situation today is that as a result of our diplomacy, the Iranians have far greater opportunity than ever before to make that vision a reality. They have not been disabused of the notion that we are receding, but they have been given the resources to accelerate that decline.

And I think that creates a very dangerous dynamic that the next administration, no matter who it is – we can certainly speculate about who it is going to be, but that is a dynamic you are going to be seeing no matter who becomes president, an Iran that is on the march, and an Iran that is increasingly ideologically rigid, and an Iran that is an existential threat to American interests and the interests of our allies.

Q&A

Audience member:

Ilan, you mentioned Iran’s relationship with its proxy terrorist organizations through which it really prefers to operate for the most part; Al Qaeda on 9/11, Hezbollah in Beirut. What would you say or how would you characterize Iran’s relationship with the Islamic state?

Ilan Berman:

I think it is interesting, and I do not want to steal Michael’s thunder, and I actually think Michael Pregent has much more sort of on the ground information, so as I see it right from the comfort of my Capitol Hill office, we fundamentally misunderstand the prevailing bonds that glue people and glands together in the Middle East. So the Obama administration’s overriding imperative in talking to Iran [relates to this].

There was a piece, and again, I do write for Foreign Affairs occasionally, but not necessarily [because] I am such a fan of their ideological bent, but it is nice, it is a prominent publication, but they had a piece a couple of issues ago which I totally disagreed with, but I really like the title because I think it really encapsulated the Obama administration’s foreign policy. The piece was called Right-Sizing America’s Role in the Middle East, which presumes that America’s role was outsized before, which I think you could argue with, but clearly that is not very far from the way that the White House thinks about us needing to pull back over the horizon, us needing to have a smaller footprint.

But here is the problem. It is very difficult for the Obama administration to articulate that argument without acknowledging that the region is on fire, and the Islamic State is the principal arsonist. It is not the only one for sure, but it is for the moment the principal arsonist. So if there is a need to use Iran for something, it is the need to flip Iran so Iran becomes a durable, reliable ally in the fight against the Islamic State.

I think that fundamentally misreads what Iran wants to do. The Islamic State is a threat after a fashion to the Islamic Republic. Yet, what Iran is likely to gain as a result of being our deputy or being deputized to carry the fight to the Islamic State on our behalf is that there really are now only two outcomes in Iraq. We can either have an Iranian garrison state or you can have the Caliphate. The Iranians would be happy with the expansion of the Caliphate.

The Iranians would certainly be pleased with an Iraq that is even more compliant, even more subservient than it is today, and so the dominant paradigm that we always talk about is, well, the White House is thinking about Iran and ISIS in the terms of the enemy of my enemy is my friend, but in the Middle East that is not the dominant paradigm. The dominant paradigm is me and my brother against my husband, me and my cousin against a stranger, and in this particular case, ISIS is not the stranger, we are the stranger.

And I think it is useful to remember because there are limits. It does not mean that Iran tactically will not do things that we like in the war against ISIS, but there is a huge moral hazard in assuming that Iran strategically is aligned with us against them because I think that fundamentally misreads the end state that Iran wants to create.

Douglas Burton:

I sometimes write about Kurds. What is Iran’s strategy for dealing with Kurdistan? What do they hope to gain by providing militias, supplying militias that would retake cities like Mosul and so forth?

Ilan Berman:

Well, I think it is a delicate game, and I am not a Kurdish expert. I am one of those rare people in Washington that actually tells you what he does not know, so I can always speak a little bit about this, but my sense is that tactically, this makes sense because the struggle against ISIS sort of overshadows the far-off prospects for Kurdish independence. However, the more the Kurds gain, and the more the Kurds rise, and Iranian Kurdish elements become more aggressive, the more it becomes a problem for the Islamic Republic itself, and so you can see that cooperation at least on a tactical level transform rather quickly into strategic competition if the Iranians feel threatened. I do not think they feel threatened yet. I think right now is an all-hands-on-deck sort of moment, but that does not necessarily mean that is going to last for a long time.

Audience member:

Different Republican candidates have said they are going to tear up the nuclear deal on the first day in office. Let us assume they do that. First, how does it work? What are the Europeans going to then do? And then what would we do as a replacement policy?

Ilan Berman:

Multiple Republican candidates have said we will tear it up. You know why? Because it sounds fantastic, because I also would love to tear up the deal. However, what I will tell you is something they will not tell you because they do not have the time or the bandwidth on that stage. It does not matter. It does not matter because the money is already dispersed. Iran will have a year of unencumbered access to that $100 billion dollars, so all the negative trends that we talk about, all the negative things we talk about, are going to be at least in process already.

So to me, the much smarter strategy is yes, if you talk about abrogating the deal, you should talk about rebuilding the sanctions coalition, all that stuff, but really, for me the smart money is doing something that Washington does reasonably well, which is red team, putting smart people together to think about how the Iranians are likely to behave as a result of what I would call unjust enrichment, and beating them to the punch.

And there are a lot of things we can do, so I will give you an example. Congress loves sanctions. They love it because sanctions are a more hermetic and standoff tool than say kinetic action. The Iranian Revolutionary Guards dominate at least a third of the Iranian economy, so there is a lot of merit [to sanctions], and some members of Congress are beginning to sort of talk in this direction. There is a lot of merit to thinking strategically about is it possible, and if so, how to complicate the IRGC’s access to international markets. And this may be a resource question. I think you can make a pretty credible case that our Treasury Department simply does not have the resources to figure out who all of the IRGC companies are, and who they are trading with, but that is a resource problem, more or less.

There is lots of stuff we can do with regard to public diplomacy, but there are many, many things that we can do in terms of thinking strategically. If we really sort of put our heads together and say okay, so now the cat is out of the bag. Right now, Congress, unfortunately, is still locked in this sort of fighting old wars dynamic where people are yelling at each other for voting incorrectly on the nuclear deal. I also yell at people for voting incorrectly on the nuclear deal, but unlike them, I actually understand that I like to play the field where it lies, and the field where it lies is the Iranians just got access over the last month to this money, [so] we should probably figure out what they are going to do with it.

Audience member:

So if we do those things, should we then pretend that the deal is in effect, kind of subvert it ourselves, or [something else]?

Ilan Berman:

Well, maybe, but I think if you start doing those things, if you start gaming out, I would call it a consequence management strategy, so this money has been dispersed, here is how Iran is likely to behave. We need to manage the consequences. Does that mean additional missile defenses to Israel and the countries of the southern Gulf? Maybe. Does it mean X? Does it mean Y? We can talk about it.

My sense is that the nuclear deal loses its existential value if Iran is constrained in what it can do with the benefits thereof, so it almost becomes immaterial whether you tear it up. I think symbolically it is very important to tear it up and say this is not the deal I would have signed, or my members, my other Republican candidates would have signed. But the reality is the strategy that whatever administration is going to apply I think it does not matter if they tear it up, it just matters if they stop the bleeding.

Audience member:

What makes sense for American policy obviously depends on what the truth is about what is going on in Iran. To refer to Iran is about as empty as to refer to America or Americans. Americans are a diverse group of people. They are a diverse group of people. My Iranian friends both here and there have a wholly different understanding of things. The Revolutionary Guard benefitted from the sanctions because they were the ones that had the capability to circumvent it. That is why they dominate a third of the economy, etc., so they opposed it vigorously.

But according to my Iranian friends, the majority of Iranians embraced it because they want to get rid of this regime, they want to embrace the West. They were very pleased with the outcome of the election that you had a different interpretation of, not that they see a spring blossoming this Spring but a gigantic step along a long road toward re-liberalizing the economy and embracing the West.

So if that is what the reality is – we cannot know that that is the reality more than we can know what you described is the reality – if that really is the reality, what would America’s ideal policy be to encourage that very positive development of recovering Iran?

Ilan Berman:

No, I think that is a fair point, because we cannot know that they are correct just as we cannot know if I am correct, I am going to proceed as if I am correct, but I would only point out that this is not the first time this has happened in history. If you go back to the late 1990s, there was a ‘reformist’ president named Mohammad Khatami, [which] came to power, and he launched a program called Dialogue of Civilizations, which was not at all dissimilar to what you are actually seeing now in terms of rhetoric and in terms of programs that are being implemented by Hassan Rouhani and the technocrats that surround him.

What you saw over time though was that that program had a lot more to do with increasing and enhancing the stature of the regime, the clerical regime, than actual trickle-down economic effects, so I think, right, the proof is in the pudding. And it is still too early [to tell], but I, having spent a lot of time looking at the Iranian economy and looking at how the IRGC dominates and overshadows, and how the clerical institutions really sort of subvert the republic part of the Islamic Republic, I find it very difficult to believe that this time is going to be different.

[And I mean that] in the sense that it does not mean that the regime is not going to get stronger, it is already going to get stronger, what I have trouble believing is that for the first time in its what, 37-year history, the regime is actually going to turn around and share that strength and share that trickle-down effect with the people. [And I have trouble believing that] because they have never done that before. I would love to be wrong.

I would love to be wrong because my sense is anybody that studies Iran is captivated by the fact, as you said, Iran is not a monolith, two-thirds of Iranians, two-thirds of 81 million people, are 35 or younger, so think about what that means. The revolution happened 37 years ago, right, so what you are looking at is multiple generations that have no recollection of Khomeini (most of them have no recollection of Khomeini), certainly no recollection of the founding ideals.

So what they care about more is more tactile things, can they interact with the West, can they travel to the West, do they have purchasing power, all this stuff. And again, this may be the first and last time in a public speech I ever quote Tom Friedman, but I will do it. Tom Friedman a decade ago was looking at this phenomenon in the context of deferment that was happening in Iran in the early part of the first Ahmadinejad term, and he called Iran the ‘ultimate red state’. He did not call Iran the ultimate red state because he was spending a lot of time in Tehran, he called it the ultimate red state because he was looking at all these socio-economic markers that suggest that the people were Westward looking.

What I think we run the risk of doing, though, with this deal is strengthening the regime, and making the people stronger, making the people more nationalistic, and consolidating the regime’s power over them, and diluting the appeal of the West, because it looks like we do not have the courage of our convictions, or at least we are willing to barter them as a result of our concern over one aspect of Iran’s rogue behavior.

And I think over the long term that is going to come back and bite us because by dint of demography, the Iran of ten years from now is going to look very different than the Iran of today, [and that is] because the clerical regime is going to die off, so my sense is that [the Iranian people will triumph over the regime]. My money has always been on, the Iranian people. I am delighted that they are encouraging them. I would really like to do a little bit of stop-motion photography because my sense – I could by wrong, but my sense is a year from now they are going to be far less enamored with the perceived benefits of this.

Audience member:

Ilan, you talk about a lot of spending by Iranian clients, Hezbollah, Hamas, Islamic Jihad, Assad, Yemen, militias, major investments in Russia, North Korea, and all the while a third of this is going to the Revolutionary Guards. This is a capital-intensive strategy, and I do not see any hiccups in it over the years when sanctions are strengthened, when the value of oil is cut by a fraction of itself. It seems like we ought to be able to produce [unintelligible] by subsidizing the shale industry, but they do not seem to be. They seem to be immune to it.

Ilan Berman:

I think to a point [that is true]. What I think is necessary to point out is if you look globally at this rogue network that Iran has built – this is the plug. If you buy the book, I talk about Africa, Asia, and what they are doing. Historically, it is a poor man’s network. Sudan is radical, but it does not have a lot of money. Venezuela is radical, but it does not have a lot of money. The list goes on.

One of the most dangerous potential dynamics that I see, because as you said, it is a capital-intensive strategy, [is that] the Iranians for the first time have the ability to match ends and means. Gor example, in Latin America, over the last decade they signed over 500 agreements on everything from trade to agriculture or whatever, but with the exception of Venezuela, most of them were just promises. They were just signatures on a paper. They were not actualized.

But what we could be in the throes of seeing is an Iran that moves from being a partner of these regimes, a cash-strapped partner, to actually being a patron of them, and that creates a very different dynamic for global security where, all of a sudden, Iran can be counted upon to fund a North Korean strategic project or whatever it is. Whether they will or not remains to be seen, but I worry about those black swans where Iran has the capability [and] it has the intent. We are just not watching them do it quite yet, but I think you make a [good] point.

By the way, this is at least in part the administration’s argument for why we had to do the deal. They were saying sanctions were failing, the Iranians still had money. From my conversations with foreign officials, what the administration did was functionally the foreign policy equivalent of what the Pentagon calls a self-licking ice cream cone. They posit a theorem, which is that the sanctions regime is failing. They act as if that theorem is correct, and then everybody else begins to believe it, and they also start acting like it, and they can turn around and say, hey, look, sanctions are failing.

My sense [is] you are never going to get a sanctions regime that is hermetic enough to prevent the Supreme Leader from having gas for his car or whatever. Sanctions are not built that way, but sanctions were doing – certainly at the tail end when we started doing macroeconomic, structural sanctions that targeted Iran’s central bank, were having a material effect on the Islamic Republic. And I would make the argument that we did not wait to see the depths of how much money we could leech out of the Islamic Republic as a result of that economic pressure.

The administration preemptively started these negotiations. My son plays soccer. It would be as if in the third or fourth quarter of the game, his team was winning so handily that they decided to sit out the rest, because we had the advantage, we had the home field advantage. We were really beginning to bleed them in a way that we really had not before because we were seeing material effect, and we decided to abdicate that superior leverage in favor of diplomacy, so my sense is you are right, but I am not sure that we followed that train of thought to its logical conclusion, to actually see or witness whether or not we could bleed them in earnest.

Audience member:

I know they are anti-Israel, but is it getting worse and do they have the means to be more hostile and threaten Israel more now than ever before?

Ilan Berman:

I think that is an interesting question. I mean if you flip that question on its head, meaning do the Israelis perceive them as being more of a threat now, Israeli opinion is sort of notoriously multifaceted. You will never get two Israelis to agree on anything. The Iran Deal is the same thing. You have a minority of national security planners who say Iran is the one, big, existential threat, and so we have deferred them. We may have differed them for more than ten years, but at least ten years we have taken off the table. We do not have to worry about Iran’s nuclear threat.

Everything else is sort of management. We can manage Hezbollah. We can manage Hamas. We fight these wars every two and a half years or so. We can do it. But the vast majority of, for example, defense planners, the folks who do missile defense, are looking at an Iran that even if Iran is not directly more hostile, Iran’s ability to empower hostile elements on Israel’s periphery has increased dramatically as a result of the nuclear deal, so by default, Iran is a bigger threat, and so that is sort of what they are trying to work through, what they are trying to grapple with.

It does not mean that Iran is going to overtly act more aggressively, but I would point out that it is already having an effect, the perception of Iran rising. The Supreme Leader of Iran four, five months ago, issued an 80-page pamphlet about Palestinian resistance in which he wrote, among other things, that the Palestinians have a sacred duty to resist Zionist occupation. If they cannot do it with their guns, they should do it with their knives. This is not to say that the Supreme Leader is instigating the knife intifada that is happening in Israel. He is certainly not helping. He is certainly not moderating the rhetoric.

And one of the very dangerous dynamics that Israeli officials are concerned about is the twin threats of a rising Iran, a strategically more capable Iran, and an Islamic State that is spreading around the region, is they are cumulatively radicalizing the Palestinians in a way that is very hard for the Israeli national security establishment to control. In this context, Iran is not the only problem, but it is a big part of the problem.

Robert R. Reilly:

Just to add to one of your answers, it appears that when Iran’s reformist president, Khatami, was holding his Discourse of Civilization, one of his most conservative opponents was Rouhani, who is now the reformist president, so there is always the problem going on there. My question, though, for you is related to what Walid Phares said here several weeks ago, that it is not so much a matter of if the Islamic State is going to be defeated as to who will defeat the Islamic State, and Iran wants to make very sure that it is Iran, Iran or its proxies, that defeat the Islamic State so that it will have unimpeded access across the Iraqi-Syrian landscape to the Mediterranean. And the Sunnis want to make sure they did defeat ISIS so as to prevent Iran from having that [unimpeded access]. Do you think that is accurate, number one, and number two, if it is, what can the Sunnis really do about it with Russia in the picture, etc.?

Ilan Berman:

Well, that is very difficult to navigate my way through, but I would say I think that is absolutely right. I think another layer of nuance is timing. I think the Iranians want to do that, but they want to do it after the semblance of a coherent, cohesive Iraqi state is no longer a threat to their domination, right, because there is such a thing as winning against ISIS too soon in which Iraq stands up, and Iraq is unified, and is consolidated, and it is difficult for Iran to expand its influence.

I think the Iranians have created a very effective asymmetric influence structure in Iraq, working through co-opting politicians, working through Shiite militias, but to them, a unitary Iraq is also an existential threat. For those of you that follow Shiite eschatology, you know that the most important Shiite cleric is not the Supreme Leader, it is an Iraqi Shiite named Ayatollah Sistani who lives in southern Iraq. So for Iran, a unified, independent, stable, confident Iraq has always been an existential problem.

So my sense is that Iran is getting one half of its scratch. Iraq is disunified. Iraq is in shambles. Iraq is being overrun. ISIS is a problem, certainly, but Iran wants to solve that problem in a way that keeps Iraq disunified, weak, and subservient.

Audience member:

[Unintelligible] when he drives from Baghdad to the Kurdish capital, there is a checkpoint, and you have to have a passport. He says for all intents and purposes, Iraqi Kurdistan is an independent country.

Ilan Berman:

I think that is right, and again, I am not a Kurdish expert, but I can tell you that there was a time not that long ago where a good friend of mine was actually serving in the consular office in Basra in the south of Iraq, and they had the exact same situation, but the language you would have to speak in was Farsi, right, because it was de facto an Iranian protectorate, which tells you a little bit about sort of the fragmentation of Iraq, about Iraq not being a unified country. I think certainly in the south of the country that works in Iran’s benefit.

What Iran worries about is Iran worries about the Kurds becoming too powerful, too independent. They worry about the Kurds having a moment, a moment after which they have done so much for the international community, it is not possible to deny them independence anymore, and by the way, the Iranians are not the only ones that worry about this. If you look on a map where Kurdistan would emerge, it would be as part of Syria, as part of Iraq, as part of Iran, as part of Turkey. It is the one area where the territories converge. It is also the one thing that all four countries can agree on.

Keeping the Kurds down tends to be a multi-partisan enterprise, and so I think the Kurds are helping now, but as I said before, I mean I think that cooperation turns into competition fairly soon if it looks like the Kurds are beginning to really become an independent country.

Audience member:

I take from your writings that a lot of the things that happen inside of Iran no matter what the West perceives as moderation, like Gorbachev with perestroika and glasnost, is done not for external reasons or not for moderation but for internal reasons, and if that is true, does anybody in this town understand that?

Ilan Berman:

Well, Condoleeza Rice once said that none of us are Russian experts, we all just dabble, so I would like to [say], hey, listen, whom I to argue with the Secretary of State, the former Secretary of State? So none of us are Iran experts, we all just dabble, but I think that point is exactly right. Because we are the United States, we tend to assume that things are bilateral, they are effectively bilateral, meaning September 11th happened to us, and therefore Al Qaeda was trying to target us.

My friend, Mike Doran, who some of you know, he is at the Hudson Institute, wrote what I would say is the best piece immediately after September 11th on Al Qaeda’s thinking. And I think he makes a pretty compelling case. You could argue with him, but he makes a pretty compelling case that this was someone else’s civil war. This was Al Qaeda striking us as a way of communicating a message – to us, certainly, but also to audiences in the Muslim world about its ascendance, about the weakness of the West. This was not just about us.

And my sense is – [and this is] not the same scale, but a lot of what is happening in Iran is driven by a dynamic all its own. It is the pushback against the technocrats who are overseen by Rouhani. It is their pushback against the established clerical elites. It is those elites’ attempts to curb the power of the Revolutionary Guard. These are all dynamics that have very little to do with us, with anything to do with us, but I think they animate at least some of what we are seeing. We are just interpreting it from an American-centric prism.

Audience member:

Do you think the infusion of the $100 million dollars will actually [allow] the Iranians to give this to Hezbollah and Soleimani’s Quds Force to immediately implement terrorist actions throughout the world? That is one of the concerns that people have.

Ilan Berman:

It is. When I give this talk, I sometimes use PowerPoint. I have this great slide from a year ago that this Israeli think tank put together about [the] scope of Iranian terrorist activity as it was two years ago when it was under sanctions, and it was pretty global. When you stretch out the map, and you look at it, it is a pretty extensive map, so if you just assume that maybe what you are looking at is not an immediate acceleration of plots but more of them, that paints a pretty dramatic picture because they were already extensive with Iran under sanctions. An Iran that is economically constrained was still doing a bunch of very detrimental things.

Stuart Levey, who is the former past Treasury Under Secretary for Terrorism and Financial Intelligence, made the comment a few years ago that Iran at the height of sanctions had a nine-digit line item in its budget for the support of international terrorism. So even if a very small fraction of this $100 billion dollars actually finds its way, I am not here to tell you that they are going to spend all of it on terrorism. I do not think they are, but even if a very small fraction is spent that way, that nine-digit line item becomes a ten-digit line item, and that is an expansion in qualitative and quantitative scope, so I think that is certainly something to worry about.

Robert R. Reilly:

Great, Ilan, thank you very much.