Some have described them as the Corps of Engineers of Islamic
Revolutionary Guard Corps (IRGC).
If so, the Rev. Guards’ Khatam-ol-Anbia conglomerate is more akin to
the Corps of Engineers run by the Sopranos.
An estimated 1/3 of the Rev. Guards 120,000 troops work for
Khatam-ol-Anbia, digging underground bunkers, hiding away nuclear
materials, building roads and schools (and more underground bunkers) in
South Lebanon.
Increasingly, they also getting into the banking business in northern
Iraq, and are horning into major construction and development projects
such as the Tehran metro and the South Pars natural gas field
development project.
It is because of these last activities that the Bush administration
decision to designate the IRGC as a “global terrorist” entity, as
leaked to the Washington
Post this week, could have a tremendous impact on Iran’s ability to
lure Western companies into its embrace.
While the immediate financial impact of designating the IRGC under Executive Order
13224
will be little or nothing because the IRGC has no holdings in the US,
the political impact could be immense, says former Treasury Department
analyst Jonathan Schanzer.
“By designating the IRGC we are sending a message to the world that we
are looking at an arm of the Iranian government and saying it is a
terrorist entity. That is significant,” Schanzer tells me.
“The goal of this type of step is to scare off the foreign oil
companies, send them a clear signal that they have to get out now, jump
immediately, pull their funds out,” he believes.
Schanzer knows the subject inside and out. As a former deputy to
Undersecretary of Treasury Stuart Levy, he was involved in drafting
earlier sets of financial sanctions against Iranian banks and other
entities, that have hugely impacted Iran’s ability to access
international capital markets and conduct business in U.S. dollars.
He believes that this type of sanction has a “resididual effect” that
will impact “any entity providing funds to the IRGC or doing business
with them,” making them potentially liable to be designated by the
United States as a terrorist sponsoring organization as well.
That is one powerful tool, and it will hit some of the world’s biggest
oil companies head on.
U.S. officials are not yet commenting officially on the proposed
designation, but unofficially have been telling reporters that the move
came as a result of a growing frustration within the administration
with the lack of effectiveness of the United Nations sanctions on Iran.
“Time is short,” one administration official told me.
The administration is clearly counting on the fear factor. By
designating the Revolutionary Guards in its entirety, the U.S. is
hoping to make foreign companies doing business with Revolutionary
Guards companies think twice about the wisdom of continuing that
relationship.
“How much risk are they willing to accept? Are they willing to wake up
one morning and find that their U.S. bank accounts have been frozen? Or
their U.S. subsidiaries shut down? We want them to be forced to make a
choice between doing business with the IRGC, and doing business with
the rest of the world,” an administration source said.
Over the past three years, the IRGC has moved from being a purely
military organization, parallel to the regular armed forces, to being a
military-economic cartel, similar to the People’s Liberation Army in
Communist China.
In 2004, when the Iranian government awarded the management of Tehran’s
new airport to a Turkish company, the IRGC showed its clout by
occupying the airport and preventing it from opening, until the
contract was cancelled and given to one of its own companies.
Since former Revolutionary Guards officer Mahmoud Ahmadinejad took
power in August 2005, the business activities of the IRGC have expanded
dramatically.
The biggest and best known IRGC commercial enterprise is
Khatam-ol-Anbia (Ghorb). The “Ghorb” part means “base,” just as
“al-Qaeda” means “base.” Khatam-ol-Anbia itself means “The Last
Prophet,” a term used to designate the Prophet Mohammad.
“Khatam ol-Anbia (KOA) handles billions of dollars of industrial,
construction and oil projects in Iran and elsewhere,” a former Iranian
military officer told me. “They are involved in huge oil exploration
projects in southern Iran, the Tehran metro, and have close ties to
Chinese oil companies.”
This source, who was able to quiz Rev. Guards officers in Tehran about
KOA’s activities, also confirmed their involvement in construction and
banking activities in northern Iraq, and extensive involvement on the
ground in Lebanon, where they were responsible for building the
underground bunkers used by Hezbollah to store the Iranian and
Syrian-supplied rocket launchers they used against Israel during last
summer’s war.
KOA hit the big time last year, when they won a series of no-compete
bids with the Iranian government, including a $2 billion deal to
develop parts of the South Pars gas field, a separate $1.3 billion
contract to build a pipeline, and a
$1.2 billion deal to build the 7th line of the Tehran metro.
Once Khatam-ol-Anbia (KOA) gets the business, it turns around and
subcontracts to mostly foreign companies, said Dr. William Samii of the
Center for Naval Analysis. “It doesn’t do much of it itself.”
In Feburary, for example, KOA officials publicly
signed a $500 million contract with Daelim of South Korean to
produce liquefied natural gas from the South Pars gas fields.
The list of companies working on the South Pars project is long, and
includes oil industry giants such as Total and Technip of France,
Russia’s Gazprom, Italy’s ENI, Petronas of Malaysia, LG of South Korea,
and Toyo Engineering of Japan.
Once the U.S. designation becomes official, this means all them
potentially could face being designated as terrorist entities
themselves unless they severed business ties with KOA and other IRGC
entities.
“Our objective is that nobody should be doing business with them,” an
administration official said.
“We will take a very serious look at any business anywhere in the world
that is doing business with the IRGC and force them to make a choice.
We’re going to make it as hard as possible for them to continue doing
business with the IRGC.”
Ahmadinejad and IRGC leaders wanted KOA to get involved in oil and gas
field development to break the back of the Iranian “oil mafia,” Dr.
Samii told the American Enterprise Institute at
a recent conference.
“Who is the oil mafia? Hashemi Rafsanjani and his associates, by
implication,” he added.
Samii told the charming story of how KOA managed to wrest the ownership
of a Romanian oil rig in the Persian Gulf away from a company called
Oriental Oil, which was owned by people close to Hashemi-Rafsanjani.
But neither KOA nor Oriental Oil had ever paid the Romanians for the
oil rig. Last October, when the Romanians tried to get it back,
“suddenly the IRGC Navy showed up, boarded the oil rig and took it
over,” Samii said.
“So it shows that Khatam-ol-Anbia, despite its protestations of being a
purely commercial enterprise, is willing to work with the armed aspects
of the revolutionary guards to pursue its economic objec tives,” he
added.
If the U.S. Treasury won’t get you, the Iranian Sopranos in the Rev.
Guards will.
Caveat emptor, as they say.
Kenneth R. Timmerman was nominated for the 2006 Nobel Peace Prize along
with John Bolton for his work on Iran. He is Executive Director of the
Foundation for Democracy in Iran, and author of Countdown to Crisis:
the Coming Nuclear Showdown with Iran (Crown Forum: 2005). Original:
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