OBAMA FAILS TO WIN SUPPORT OUTSIDE WASHINGTON FOR SANCTIONING IRAN’S CENTRAL BANK

Flynt appeared on Al Jazeera Friday, see video above, to discuss press reports, see here, that the Obama Administration has at least temporarily backed off its plans to impose sanctions against the Central Bank of Iran (CBI).  As Flynt Pointe out, the idea of sanctioning the CBI is nothing new.  Neoconservatives and their fellow travelers in the Obama Administration have wanted to it for some time—above all, because it is a “back door” way of imposing an international embargo on Iranian oil exports. 

But there have always been powerful arguments against sanctioning the CBI (which may have something to do with neither the Bush Administration of the Obama Administration actually moving ahead with the idea).  The notion of sanctioning the CBI would be truly bad policy.  So why, over the past few weeks, did the Obama Administration start what looked like it might be a serious effort (at least by the Obama Administration’s standards) to drum up international support for doing it?  As Flynt notes, the answer—which often seems to be a major part of the explanation for bad foreign policy decisions by Obama—is domestic politics. 

The Obama Administration is under mounting pressure from pro-Israel constituencies and the Congress to sanction the CBI.  This pressure helps to explain not only the Administration’s decision to start an international drive for tougher sanctions against Iran (including, potentially, sanctions on the CBI), but also the otherwise bizarre timing of its high-profile accusations—advanced by no less than the Attorney General and President Obama himself—of Iranian government complicity in an alleged plot to assassinate the Saudi ambassador in Washington, see here.     

In essence, the Team Obama hoped that its sensational charges against Tehran would persuade otherwise resistant third countries to reconsider imposing sanctions on the CBI—thereby allowing it to look “tough” and hold Congress’s latest proposals for truly idiotic Iran sanctions laws at bay.  (Both houses of Congress are considering bills that, if enacted, would not only push the executive branch toward sanctioning the CBI but would also prohibit any U.S. diplomat from talking to an Iranian official unless Congress were notified at least 15 days in advance, and the President claimed that contact was necessary to avoid severe harm to U.S. national security.)  But the master plan did not work.  As senior U.S. officials have traveled to Europe and Asia during the past couple of weeks to shop around the idea of sanctioning the CBI, the response has not been encouraging, to say the least.   

Frankly, no one other than Gulf Arab elites and a few pliable Europeans (mostly British, as far as we can tell) believes the Obama Administration’s story about Iranian government sponsorship of a plot to kill Ambassador Adel al-Jubeir.  Furthermore, whatever the merits of the Administration’s claims, buying Iranian crude and avoiding a major, price-raising disruption of international oil markets is simply more important for many substantial international players than accommodating the latest in Washington’s never-ending stream of petty gripes against the Islamic Republic. 

And, so, once again, the Obama Administration must try to make the best of a bad situation of its own devising.  Thus, Administration officials, speaking on background, tell reporters that they have decided to back off sanctioning the CBI because they do not want oil prices to go higher.  But the claim is dishonest on its face.  If that were the Administration’s priority, why shop around the idea of sanctioning the CBI in the first place?  What is disheartening is that the Administration was prepared to go through with this; it just could not find enough willing partners to do so. 

Moreover, the issue of sanctioning the CBI is not going away.  Motivated by pro-Israel constituencies and election-year politics, Congress will continue pressing for sanctions legislation that, if enacted, would be profoundly damaging to American interests.  If the Administration really wants to head this off, at some point, President Obama will have to find his own political backbone.  Given his Administration’s record on Iran policy, we are not optimistic about this prospect.