Tag Archives: Peter King

Caspian Watch # 10: Russia Makes Its Move In Yeltsin’s ‘Pipeline War’

(Washington, D.C.): With official Washington completely absorbed with the prospects for
renewed conflict with Iraq and President Clinton’s deepening personal problems, the
timing and
source of ominous developments in the Caspian Basin are not getting the U.S. attention
they require. It would appear, as the Communists were wont to say, that this is “no
accident,
comrade”: Russia is actively exploiting — if not actually abetting — the turmoil in
both the Persian
Gulf and the southern Caucasus regions.(1)

Signposts for Moscow’s Bid to Control Caspian Oil

The most recent of these developments was the massive effort mounted for the purpose of
liquidating Georgian President Eduard Shevardnadze. Senator Sam
Brownback (R-KS),
chairman of the Foreign Relations Committee’s Near Eastern and South Asian Affairs
Subcommittee, described the attack in a speech delivered on the Senate floor on 10 February:
“According to Georgian authorities, the attempted assassination was well-planned and
well-executed by as many as thirty well-trained assailants. They were armed with
rocket-propelled
grenades and automatic weapons.”(2)

This second effort to murder Mr. Shevardnadze followed an earlier assassination attempt
against
Azerbaijan’s President, Heydar Aliyev, on 2 February. According to
Glen Howard, an analyst
for Eurasian Affairs with Science Applications International Corporation, the latter incident —
which has not been reported widely in the press — involved a bomb discovered in a sport hall just
before President Aliyev arrived to deliver a speech there. Of the planned attack on President
Aliyev, Sen. Brownback said: “Azerbaijan’s President Aliyev was also the object of an
assassination attempt in recent days, which Azerbaijani authorities believe was planned and
executed by outsiders.”

Sen. Brownback went on to make the critical strategic connection:

    “We should be mindful that these cowardly acts may be part of a plan to
    destabilize the Caucasus with the intention of scaring off American and other
    investors who seek to bring the Caspian’s great energy wealth west to
    international markets.

    “Who benefits from promoting instability in the Southern Caucasus at this
    time? Russia is everyone’s leading candidate as the outside power with the
    most to gain.     Russia has long raged and conspired to thwart Caspian energy
    from flowing any direction but north through Russia. Most parts of Russia’s
    political elite still view Caspian wealth as their own. The suspected perpetrator of
    an earlier assassination attempt on Shevardnadze remains under Russian care
    despite vociferous demands from Georgia that he be extradited. Russia still has
    bases in Georgia from which yesterday’s attack could be planned and staged.
    None of this is proof of Russian complicity, but strong suspicion of Russian
    involvement will not go away quickly. The U.S. government should make
    every effort to learn the truth.    “

We’re Not Making This Up

Sen. Brownback may be one of the few American political figures willing to speak out
truthfully
and forthrightly in an era of half-truths and appeasement of Moscow. That does not mean that his
concerns are unfounded, however. In the aftermath of Mr. Shevardnadze’s latest close-call, the
Georgian President himself declared that, “Very powerful forces are interested in a different
solution of the question linked to the transportation of oil through Georgia.” Precisely who
Shevardnadze thinks these “very powerful forces” were is made clear by actions reported by
Russia’s Interfax news service:

    “Georgia’s Parliament voted Tuesday to block [four] Russian military bases on its soil
    to aid the probe into the failed assassination bid on President Eduard Shevardnadze the
    previous evening …. Lawmakers speculated that the assailants may have been sent by
    Russia and already flown out of the country. Georgian authorities planned to carry out
    an investigation at the Russian bases.”

Interestingly, further evidence supporting the suspicion that Russia was behind both of
these
attacks comes from none other than Russian president Boris Yeltsin, himself. According to
Deutsche Presse Agentur of 10 February, “Tuesday’s Moscow Daily
Segodnya, typeset before
the attack and referring to a weekend interview in an Italian newspaper, wrote that Yeltsin
had ‘apparently realized that the use of Caspian riches is no longer a joking matter’ and
Russia’s interests must be defended.” (Emphasis added.) In another Italian press
interview
which appeared in the Corriere della Sera of 8 February — the day before the
Shevardnadze take-down attempt — Yeltsin used the term “pipeline war” to
warn against “the hullabaloo that some
Western countries are raising over problems of the energy resources of the Caspian Sea. Some of
the statements do not seek to conceal the goal of bypassing Russia and infringing
on its national
interests.” (Emphasis added.)

Why Russia Moved

Progress on a Non-Russian Pipeline: On 1 February, Washington
Post columnist Lally
Weymouth published interviews with both Azerbaijan’s Aliyev and Georgia’s Shevardnadze. In
the former interview, Weymouth posed the following key question: “The Clinton Administration
favors an oil pipeline running from Baku to the Turkish port of Ceyhan. Do you?”
President
Aliyev responded, “Yes, I favor it. I think most of the oil extracted from the Caspian Sea
should go to Ceyhan….It is true that this line is not favorable for Russia. They are trying to
make us export most of the oil through their territory.“ (Emphasis added.)

Ms. Weymouth asked President Shevardnadze a similar question: “Do you envision Georgia
having a part of the Main Export Pipeline (MEP) planned from Baku to Ceyhan?” Shevardnadze
responded, “I think we have every ground to believe that the MEP will go across
Georgia.”

Possible Armenian-Azerbaijani Entente: In recent months, the President of
Armenia, Levon
Ter-Petrossian, evinced increased willingness to embrace the so-called Lisbon Principles, an
initiative of the Organization for Security and Cooperation in Europe (OSCE) aimed at achieving
a resolution of the conflict in Nagorno-Karabakh in the interest of bringing peace and prosperity
back to the region. According to a distinguished Center Board Member and regional expert Paul
Goble: “Those [Lisbon] Principles read out by the Chairman at the OSCE Summit in 1996, call
for the restoration of Soviet-era borders, broad autonomy for ethnic Armenians in the disputed
region of Nagorno-Karabakh and international guarantees of such a settlement.”

If Armenia actually were to have embraced the Lisbon Principles, enormous momentum
would
have been imparted toward a regional settlement. This would have, in turn, created conditions for
construction of a secure Main Export Pipeline from Azerbaijan via Georgia to the Turkish port of
Ceyhan. The Russians, as members of the so-called Minsk Group (together with United States
and France), were intimately familiar with the progress being made under that Group’s auspices,
toward reconciliation between Armenia and Azerbaijan.(3)
They saw the warning signs arising
from the improving U.S.-Azerbaijani relations marked by President Aliyev’s successful visit to
Washington last summer and the arrival at the National Security Council of former U.S.
Ambassador to Georgia William Courtney, who is the Clinton Administration’s
designated point
man on Caspian matters.

As it happens, even before the Aliyev and Shevardnadze assassination attempts were
mounted,
another development of great strategic import took place in the region: President Ter-Petrossian
was forced to resign. He was induced to leave office under pressure from Prime Minister Robert
Kocharyan and his supporters committed to consolidating the fruits of Armenia’s aggression
against Azerbaijan over the disputed enclave of Nagorno-Karabakh. href=”#N_4_”>(4)

The prospect that Ter-Petrossian’s resignation will now lead to renewed conflict — with
crippling
effects for a non-Russian MEP — increased in its aftermath when Armenia’s Justice Ministry
removed a ban in effect since 1994 on the nation’s main opposition party, Nationalist Dashnak
Party (NDP). According to the Financial Times of 10 February, the NDP was linked
“with drug-trafficking and terrorism.” This contribution to the re-radicalization of Armenia could
reverberate
far and wide in the Caspian Basin.

The Bottom Line

While the Clinton Administration has, of late, begun to give greater attention to the enormous
strategic stakes (e.g., as much as 200 billion barrels of oil valued at some $4 trillion) in the
Caspian region, its present preoccupations — both domestic and foreign — have endangered such
progress as was being made to protect vital U.S. and Western interests there. Clearly
Yevgeny
Primakov and his ilk in the Kremlin have taken the measure of U.S. inaction and
distraction. They are indisputably moving to exploit and fill the resulting vacuum with
vintage Soviet-style brazenness and ruthlessness.(5)

It behooves the United States, therefore, to take a number of steps to prevent a debilitating
defeat
in the “pipeline war.” These include the following:

  • As the Center has argued since 1996,(6) the
    discriminatory Section 907 of the Freedom
    Support Act should be repealed immediately. This would be accomplished by “The
    Transcaucasus Peace, Stability and Democracy Act,” cosponsored by Reps. Peter King
    (R-NY), Lee Hamilton (D-IN) and Dan Burton (R-IN).

  • A bill entitled “The Silk Road Strategy Act,” introduced last year on the
    Senate side by Sen.
    Brownback, deserves urgent support as well as it would advance regional stability. href=”#N_7_”>(7)

  • Congressional hearings should be urgently held in the foreign relations
    and intelligence
    committees aimed at exploring all of the elements of the emerging crisis in the southern
    Caucasus and Caspian Basin — as well as the implications of Russian involvement there for
    U.S. energy, financial and security concerns.

  • President Clinton should communicate with President Yeltsin for the
    purpose of serving
    notice that further official or unofficial Russian attempts to destabilize the region (including
    actions attributed to “rogue” Russian elements, a favored and deniable Russian gambit) will
    precipitate economic and political retribution.

  • The U.S. should announce that it plans to bolster substantially U.S.-related security
    assistance     to Azerbaijan and Georgia, including the shipment of surplus military
    equipment
    and anti-terrorist training.

  • Washington should call publicly for an expansion of joint exercises in the
    region     and the
    strengthening of the so-called Eurasian battalion comprised of Ukrainian, Azerbaijani and
    Georgian forces.

  • Finally, high-level executive branch and congressional delegations should be
    dispatched
    to the regional capitals     forthwith to assert America’s keen interest in the Caspian Basin
    and
    its determination to stand with the nations of that region in their pursuit of economic and
    political independence from Moscow.

– 30 –

1. For more on the connection between the Iraqi and Caspian
dimensions of the Primakov
Doctrine, see the Center’s Decision Brief entitled Caspian
Watch # 9: Emboldened By Iraq
‘Victory,’ Russia Intensifies Effort To Undermine Azerbaijan ( href=”index.jsp?section=papers&code=97-D_180″>No. 97-D 180, 26 November
1997).

2. Georgia’s Iprinda news agency reported that ten anti-tank grenades
had exploded and four
unexploded grenades had been found at the scene. The Financial Times added:
“After the
fifteen-minute gun battle between bodyguards and the attackers, the wreckage of Mr.
Shevardnadze’s armored black Mercedes was incinerated inside and had a huge hole in the
bonnet. The hulks of four other cars belonging to the security service lay some 100 meters behind
the president’s car.”

3. Russia’s use of its participation in multilateral organizations for
subversive purposes is much in
evidence in today’s Washington Post. An above-the-fold, front-page article entitled
“Did Russia
Sell Iraq Germ Warfare Equipment?” describes how Russian inspectors assigned to the UN
Special Commission on Iraq (UNSCOM) repeatedly tipped off Saddam Hussein’s government so
as to foil efforts to search suspect sites. Not content with sabotaging UNSCOM’s inspections,
the Kremlin apparently was involved in transactions in 1995 that actually provided the Iraqis with
prohibited biological weapons-related equipment and technology.

4. The prospect of leaving office feet first may have
concentrated Mr. Ter-Petrossian’s mind on
the wisdom of resigning. On 19 January the Chief of Security for the Armenian President was
fired upon in an ambush outside of Yerevan. The very next day, a bomb was discovered under an
Armenian Embassy vehicle in Moscow which was diffused.

5. For example, in addition to assassination and intimidation, a
favorite practice in the old Soviet
playbook was the use of energy embargoes to leverage political outcomes
(e.g., Ukraine, the
Baltic States, etc.). Interestingly, the BBC Summary of World Broadcasts for 13 February 1998
reported that: “Russian custom officials have stopped the Azerbaijan International Operating
Company (AIOC), the executive arm of the Western-led consortium developing three Azerbaijani
Caspian oilfields, from transporting oil along the Baku-Novorossiysk pipeline, Sharg news agency
reported on 7th February. It said the Russian officials had halted the operation on the grounds
that the AIOC had failed to prepare the required documentation and neglected the necessary
customs formalities for pumping contract oil across Russian territory. So far only 8,000 tonnes of
contract oil have crossed the border while more than 45,000 tonnes in all have been pumped into
the pipeline, the agency said.”

6. See, for example, the following: Caspian Watch # 3:
Center, Washington Post Agree —
Congress Must Do The Right Thing By U.S. Interests in the Caspian Basin ( href=”index.jsp?section=papers&code=96-D_76″>No. 96-D 76, 1
August 1996); Caspian Watch # 6: Weinberger Issues Timely Alert Against
Interest Group’s
Highjacking Of U.S. Caspian Policy (No. 97-D
66, 12 May 1997) and Caspian Watch # 7:
President Aliyev’s Visit Should Translate Into The ‘Beginning of a Beautiful
Friendship’
(No. 97-D 107, 29 July 1997).

7. See the Center’s Decision Brief entitled
Caspian Watch # 8: ‘Silk Road’ Legislation Opens
New Opportunities For U.S. Strategic, Commercial Interests In The Caspian
Basin (No. 97-D
157, 23 October 1997).

WAS IRAN BEHIND THE TWA FLIGHT 800 EXPLOSION?

(Washington, D.C.): Scores of investigators are still
scouring the seas near Long Island in search of clues
that will help them determine what brought about the
tragic end of TWA Flight 800 last week. Although
mechanical failure has not yet been officially ruled out
as the cause of the explosion which destroyed the Boeing
747, circumstantial and other evidence seems at this
point to be leading investigators inexorably to the
conclusion that some form of explosive device — a bomb
or even a surface-to-air missile — was deliberately used
to bring down the aircraft.

If such a determination is made, an even more
difficult phase of the investigation will shortly begin: trying
to discover who committed this heinous crime.
One potential clue may have been revealed in the 19 July
editions of the popular Israeli newspaper, Ma’ariv.
According to Ma’ariv:

“Egyptian President Hosni Mubarak two and a
half weeks ago [i.e., 1 July or 16 days before the
TWA explosion] visited French President Jacques
Chirac. During this visit, President Mubarak gave his
host a top secret file. According to the information
inside this file, a secret summit was held in
Teheran of representatives of terror organizations
and Iranian intelligence heads, and they discussed a
plan of attacks to be directed primarily against
U.S. targets.” (Emphasis added.)

‘Uh, Oh’

Was the downing of TWA Flight 800, in fact, a result
of this meeting? Perhaps. Even if it were not, however,
such a meeting raises some troubling concerns. These
include the following:

  • As this meeting was not reported widely in the
    United States, was the U.S. government
    aware that it occurred and informed of its deadly
    subject matter?     One would certainly hope
    that President Mubarak would have promptly
    delivered a similar file to representatives of
    the United States — even if U.S. intelligence
    had not ferreted out such information on its own.
    This is especially true since this sort of
    intelligence-sharing was one of the supposed
    outcomes of last Spring’s summit on terrorism at
    Sharm el-Sheikh, to say nothing of the
    obligations for such cooperation that one assumes
    Mr. Mubarak accepts along with billions annually
    in American aid.

  • Among the targets for Iranian-sponsored terrorism
    could well be American forces in Bosnia — on
    whose territory large numbers of Iranian and
    other Islamic mujahedeen continue to operate. href=”96-D74.html#N_1_”>(1) Such
    troops are likely to become increasingly
    vulnerable to the sorts of attacks that killed
    nineteen of their comrades-in-arms last month in
    Dhahran as the U.S. component of IFOR is stripped
    of heavy armor and other firepower.

  • Will the United States insist upon a “beyond
    reasonable doubt” standard of evidence,
    either in connection with TWA Flight 800 or
    concerning the ambitious plan of action adopted
    in Teheran on 1 July, before taking steps to
    punish and disrupt the operation of known
    terrorist organizations — especially those
    closely linked to Iran?

The Bottom Line

The evidence reported in Ma’ariv of Iran’s
ongoing sponsorship of terrorism against American
citizens and interests underscores the wisdom of the
recently adopted legislation designed to force U.S.
allies to choose between doing business with Iran and
Libya on the one hand or doing business with the United
States. The Center applauds the efforts of Sen.
Al D’Amato and Rep. Peter King, both Republicans of New
York, for their leadership in this initiative and urges
President Clinton to sign and implement it — without
waiving or otherwise watering down its terms (as he
recently did with corresponding legislation on Cuba
championed by Sen. Jesse Helms [R-NC] and Rep. Dan Burton
[R-IN]).

– 30 –

1. See the Center’s Decision
Briefs entitled Train and Arm the
Bosnians — But Ensure That the Islamic ‘Foreign Legion’
is Sent Packing! ( href=”index.jsp?section=papers&code=95-D_101″>No. 95-D 101, 7 December
1995), and The Iran-Bosnia Scandal: Where Do
We Go From Here? (No.
96-C 35, 9 April 1996).

CUBAN CHERNOBYL: CONGRESS MUST SEND A MESSAGE TO MOSCOW, ALLIES — NOT IN OUR BACKYARD!

(Washington, D.C.): Cuban dictator Fidel Castro is at it
again: With at least $800 million in help from his friends in
Moscow and Europe, he hopes at last to bring on-line a troubled
nuclear reactor 180 miles off the U.S. coast. It has been clear
for several years (1)
that, should he succeed in doing so, it is just a matter of
time before this reactor melts down with catastrophic
Chernobyl-style consequences for much of the United States.
Tomorrow, concerned Members of Congress led by Reps. Robert
Menendez (D-NJ) and Ileana Ros-Lehtinen (R-FL) will offer the
first of possibly numerous legislative initiatives aimed at
blocking efforts to complete the Juragua reactor complex — and
at penalizing those who propose to assist Havana in doing so.

The Only ‘Fix’ for the Juragua Reactors: Start Over

Among the most lethal detritus left behind by the collapsed
Soviet empire are a string of poorly designed, ill-constructed
and/or incompetently operated nuclear reactors that pose a risk
of human and environmental calamity. Most of these are within the
former Soviet Union itself and Eastern Europe and have been
subject to chronic, unscheduled shut-downs for safety reasons.
Many are regarded as nothing less than ticking time-bombs.
Indeed, the German government was so concerned about the four
VVER 440 reactors it inherited from East Germany that it shut
them down within days of reunification.

The two partially completed VVER 440 reactors near
Cienfuegos, Cuba are in a class by themselves, however. Experts,
including defectors previously involved in what passed for a
“quality control” program at the construction site,
have identified the following, fatal defects:

  • Sixty-percent of the Soviet-supplied materials used in
    these reactors is defective.     Soviet advisors
    reportedly told Cuban officials they could not guarantee
    that valves installed in the first reactor’s emergency
    cooling system would function under certain conditions.

  • Worse yet, much of the reactor’s equipment —
    including the reactor vessel, six steam generators, five
    primary coolant pumps, twelve isolation valves and other
    sensitive gear — was left exposed to the elements and
    sea air for as much as eighteen months    . In tropical
    areas, such machinery must be stored in climate-
    controlled facilities to avoid serious corrosion and
    other damage.

  • In a number of cases, equipment designed for one
    specific function has been used for other purposes when
    the appropriate components were unavailable    . This
    sort of jerry-rigging increases the chances of systemic
    failures.

  • Construction supporting primary reactor components
    contains numerous structural defects.

  • The first reactor’s dome would not be able to
    contain overpressures associated with meltdown
    conditions.     The upper portion of the containment dome
    has been designed to withstand pressures of seven
    pounds-per-square-inch — versus some 50
    pounds-per-square-inch required of U.S. reactors.

  • As many as fifteen percent of the 5,000 welds
    joining pipes used in the reactors’ auxiliary plumbing
    system, containment dome and spent fuel-cooling system
    are known to be flawed    . According to Vladimir
    Cervera, the senior engineer responsible for overseeing
    quality control at the Juragua reactor, X-rays showed
    welded pipe joints weakened by air pockets, bad soldering
    and heat damage.

  • Bear in mind that, if a single weld in a U.S.
    reactor were suspected of being defective, the
    Nuclear Regulatory Commission would suspend its
    operations.     What is more, Cuban intelligence services
    are reported to have destroyed x-ray imagery and other
    documentation concerning safety violations, making
    corrective action problematic.

  • Cuba’s human and technological infrastructure is
    vastly inferior to that of the former Soviet Union     —
    an infrastructure which itself proved inadequate to
    design, construct and operate nuclear plants safely.

  • Finally, there is reason to believe that the
    Cienfuegos area is seismically active     — a reckless
    place to put even well-designed and -constructed nuclear
    reactors.

Taken together, these defects make it impossible to create
safe nuclear power plants out of the partially constructed
Juragua facilities. No amount of sophisticated Western
instrumentation, know-how or training will rectify fatal physical
deficiencies that can, as a practical matter, only be corrected
by razing the site and starting afresh.

A Cuban Melt-down Would Be An American Problem,
Too

Should one or more of these defects cause a failure of the
cooling system in a Juragua reactor, there would likely be a
nuclear meltdown and release of substantial quantities of
radioactivity. Such fallout would not be confined to Cuba,
though. Indeed, according to a National Oceanographic and
Atmospheric Agency analysis:

“Based on climatological data for summer 1991 and
winter ’91-’92, the summer east- to-west trade winds would
carry radioactive pollutants over all Florida and portions of
Gulf states as far west as Texas in about four days. In
winter when trade-winds are weaker and less persistent,
pollutants would encounter strong westerly winds that could
move the pollutants toward the east, possibly as far north as
Virginia and Washington, D.C., in about four days.“

Damage to human life would be further exacerbated by the
pollution of many thousands of square miles of rich ocean fishing
grounds in the Caribbean and Gulf of Mexico, pollution that would
ultimately affect the Gulf Stream and the productive waters of
the Georges Banks. The result for millions around the world will
likely be significant food shortages and/or consumption of
contaminated fish.

With Friends Like These…

Against this backdrop, it seems inconceivable that Russia,
Germany, Italy or France — nations that purport to value their
relationship with the United States — could even consider
contributing to conditions that would likely produce such a
disaster. Yet, according to Rep. Lincoln Diaz-Balart (R-FL),
Russia has recently provided $30 million in credits to help
restore the first facility and supplied its reactor and turbine,
which are now on site.

In addition, an “international joint stock company”
has reportedly been formed to provide Castro with $800 million to
complete the first reactor. Georgy Kaurov, chief spokesman for
the Russian Atomic Ministry (MinAtom), says the plant will be
generating profits and nuclear-powered electricity by 1997,
thanks to help from Germany’s Siemans AG, Italy’s Ansaldo SpA,
and the French government-owned Electricite de France. The
Europeans have, to varying degrees, denied that any deal has yet
been done or would be until after the U.S. embargo on Cuba is
lifted. Still, suspicions abound that Siemans, at least, would be
willing to install upwind from the United States parts
cannibalized from the VVER reactors Bonn thought to be too
dangerous to operate on German soil.

Former NSC chief economist and Center for Security Policy
Board of Advisors member Roger W. Robinson, Jr. — who will be
testifying on this subject before the House International
Relations Committee, Subcommittee on Western Hemisphere next
month — believes there are several possible explanations for why
Russia and these European companies might be undertaking such an
unfriendly act:

  1. It’s a shakedown: Recent Clinton Administration
    diplo-financial gambits aimed at heading off the North
    Korean and Iranian nuclear programs may have prompted
    Russia to conclude that the United States would be
    prepared to pay dearly to prevent the completion of a
    Cuban Chernobyl.

  2. It’s Russia’s only hope to recoup some of the $30
    billion Castro owes the Kremlin:     The prospect of a
    go-ahead on the Juragua reactor, particularly with the
    help of a large European investment could foster an
    otherwise unwarranted impression of stability and
    economic opportunity in Castro’s Cuba. This could, in
    turn, encourage other investment despite Fidel’s standing
    as the worst credit risk in the world according to
    Euromoney’s 1994 Country Risk report and create a
    positive cash flow to Moscow.

  3. It’s a way to give the embargo-lifters additional
    leverage:     At a moment when the congressional
    leadership is actively pursuing legislation designed to
    close loopholes and otherwise tighten the U.S. embargo on
    Cuba, the threat that Fidel could be handed a nuclear
    time-bomb might just help dissuade such initiatives, if
    not greatly help Morton Halperin and other Clinton
    Administration officials in their bid to normalize
    relations with Castro.

  4. It’s no skin off the European companies’ noses: Thanks
    to generous taxpayer-underwriting of risky foreign
    investments, European businesses like those reportedly
    prepared to help on the Juragua reactors have little to
    lose. If they actually realize a return on their
    investment, fine; if not, the German, Italian or French
    government will make them whole. Either way, employment
    can be kept high and balance sheets profitable. The same
    disregard for the consequences of such exports-uber
    alles     policies have produced chemical weapons plants
    in Libya, deep underground command centers in Iraq and
    Russia and weapons of mass destruction programs in places
    like Iran.

The Bottom Line

If ever there were a vital U.S. interest, preventing Fidel
Castro from turning his rusting reactor sites at Juragua into
Chernobyls qualifies. Fortunately, many key legislators
recognize this reality — even if the Clinton Administration does
not appear to do so. In a strong letter to the President dated 8
June 1995, House Speaker Newt Gingrich and over 140 other Members
of Congress told him “the [Cienfuegos] nuclear plant will
pose a serious threat to the safety of the United States, Central
America and the Caribbean” and urged him “to use all
the instruments at [his] disposal to pressure the Russian
government” to abandon any effort to complete construction
of this reactor complex. The congressional signatories concluded:
“We cannot allow this type of threat to the security of
the United States to be present just a few hundred miles from our
shores.” There has yet to be a reply from the
Administration.

The Center for Security Policy believes that under no
circumstances should the United States be euchred into paying for
such a dire outcome — either directly or indirectly. Reps.
Menendez and Ros-Lehtinen are right to seek in an amendment they
will offer on the House floor tomorrow to dock Moscow’s foreign
aid account by one dollar for every dollar it sends to Castro’s
nuclear program to demonstrate U.S. resolve on this matter. They
are also right to pursue every other avenue — from blocking
launches of U.S. satellites on Russian rockets to deferring
rescheduling Moscow’s international debt to suspending American
taxpayer-guarantees for energy development in Russia — to bring
pressure to bear on the Kremlin to stop this transaction at
once.

Congress should also squarely address the malevolent
behavior of companies based in allied nations. Much as Sen.
Alfonse D’Amato and Rep. Peter King propose to do in legislation
aimed at stopping dangerous trade with Iran, such companies
should be offered a choice: You can do business with Fidel or do
business in the U.S. market, but not both. The threat of import
controls on European companies involved in bringing the Juragua
reactors on-line would almost certainly dry up capital and
technology from Europe, without which it seems unlikely that
Russians could go forward.

Finally, Members of Congress need to make it unmistakably
clear to the Clinton Administration that its sub rosa bid
to improve relations with Fidel Castro’s Cuba is at an end. A
despotic government that is determinedly trying to create a
nuclear time-bomb — in utter disregard of the safety of its own
citizens, to say nothing of the detested Americanos 180
miles to the north — is not one with whom the United States can
or should do business.

– 30 –

(1) See for example, Cienfuegos —
‘A Hundred Fires’: Muchas Gracias Moscow, But No American
Chernobyls (No. 91-P 44,
31 May 1991); A ‘Ticking’ Anniversary Present: Will Russia
Give Us a Chernobyl Ninety Miles Off the U.S. Shore? ( href=”index.jsp?section=papers&code=92-D_41″>No. 92-D 41, 23 April 1992); ‘Hear
Us Now and Believe Us Later’: Business Done with Fidel Means Big
Losses When Communists Fall, ( href=”index.jsp?section=papers&code=92-D_51″>No. 92-D 51, 8 May 1992); and Castro’s
Potemkin Shut-Down: Chernobyl at Cienfuegos Still In Prospect
(No. 92-D 108, 10 September
1992).

‘IT’S ECONOMIC SECURITY, STUPID’: D’AMATO-KING-AIPAC EFFORT ON IMPORT CONTROLS SHOULD APPLY TO IRAN, BEYOND

(Washington, D.C.): In the years since Bill Clinton
successfully campaigned for president on the motto “It’s the
economy, stupid,” his foreign policy seems to have been
defined by a variation on the theme: U.S. interests will be
determined by short-term economic considerations, no matter how
ill-conceived the resulting policy might be.

The corollary to this governing principle appears to be the
axiom “If you can’t beat ’em, join ’em”: As long as
other nations are stupidly pursuing trade policies contrary to
either their long-term strategic interests or our own, we have no
choice but to follow suit.

On these grounds, for example, the Clinton Administration
has: facilitated the dismantling of the multilateral regime for
controlling exports of militarily relevant technologies (known as
COCOM); aggressively marketed such technologies to China;
essentially normalized relations with Vietnam; and repeatedly
dallied with the idea of easing the trade embargo against Cuba.
The same considerations are also at work in its decision to
reward North Korea with not only $4 billion in new nuclear
reactors but also with trade relations. And the Administration is
actively contemplating at least the partial lifting of economic
sanctions against Serbia and Iraq in the face of mounting
pressure from its allies.

Convergence Theory

To varying degrees, this expediency-driven policy has been
rationalized as “economic engagement.” It amounts,
ironically, to a capitalist mutation of the Marxian doctrine of
economic determinism and assumes that liberal Western values and
democratic institutions will inevitably follow from exposing
closed economies to market forces.

In practice, however, such a policy is doomed to the same
results as its precursors — appeasement and detente: If
unconditioned upon and unaccompanied by systemic political and
economic reform, the result will be to provide life-support to
totalitarian regimes, extending their brutal hold on power at
home and greatly increasing their potential for malevolence
abroad. Thanks to the Clinton Administration, there is scarcely
an odious regime in the world today that is not already enjoying
trade and financial relations with the United States or that is
reasonably expecting to do so shortly.

What About Iran: ‘CoNogo’

The Clinton Administration has been discomfited in recent
days by growing public debate over its policy of continuing
economic engagement towards a totalitarian regime it supposedly
wants to contain. Iran’s frightening arms build-up, including its
acquisition of key ingredients of a nuclear weapons production
complex from Russia, and its threatening military actions in the
Persian Gulf compelled Mr. Clinton in mid-March to block a
massive investment in Iran by the U.S. oil company, Conoco.

The obvious next question was: Why should the American oil
industry be allowed to persist in buying billions of dollars
worth of Iranian crude oil, as long as it is refined and sold
overseas, thereby providing hard currency flows used to
underwrite the mullahs’ ominous machinations? The typical
answer: We have no choice since we will be unable to persuade
other nations’ companies to follow our lead if we stop; and we
will, therefore, only be hurting American corporate and
employment interests by doing so.

The Third Way

Fortunately, two Republicans legislators from New York —
Senator Alfonse D’Amato and Rep. Peter King — and the
American-Israel Public Affairs Committee (AIPAC) have joined
forces to give the U.S. a choice. Messers. D’Amato and King
introduced legislation last month that has been endorsed by AIPAC
as part of its important new “Plan for Action” against
Iran.

The D’Amato-King bill would, according to the Washington
Post, “prohibit the U.S. government from doing business
with any corporation anywhere that does business with Iran, ban
any U.S. exports by or to such a company and prohibit the
importation into the United States of any goods produced by a
company doing oil business with Iran or selling Iran goods with a
potential military use.” As Sen. D’Amato put it, his
legislation would compel “a foreign corporation or
person…to choose between trade with the United States and trade
with Iran.”

In January 1995, Senator D’Amato elaborated on his concerns
about on-going U.S. trade with Iran:

“We are subsidizing Iranian terrorism by purchasing
their oil and it has to stop. Iran is arming itself to the
teeth, and we are simply ignoring it. We must sever any
remaining trade between the United States and Iran to ensure
that we do not provide them with anything that will come back
to haunt us.”

In the past, such a choice has been forced upon foreign
entities with therapeutic effects. For example, in 1982, the
Reagan Administration imposed crippling import controls against a
handful of foreign companies (including a U.S. overseas
subsidiary) involved in the construction of a strategically
portentous Siberian gas pipeline for the Soviet Union when those
entities shipped equipment to Moscow over White House objections.
Three of those companies ultimately went belly up. A few years
later, similar steps taken in retaliation for Toshiba’s illegal
transfer of sensitive machine tools to Moscow compelled it — and
the Japanese government — to tighten up export practices
governing such technology.

Towards a Policy of ‘Economic Security’

The value of the D’Amato-King legislation could extend well
beyond Iran, moreover. By establishing that foreign concerns can
do business with either pariah states or the world’s most
lucrative market — but not both, it can restore leverage
and moral authority that has dissipated under the present and
previous U.S. administrations. No longer will the only
alternative to Uncle Sam “going with the flow” in
international trade with tyrants be the undesirable option of
unilaterally denying American firms the opportunity to compete
for foreign development projects and sales.

The conundrum for the Clinton Administration, of course, is
that if it embraces this sensible policy toward Iran, how can it
justify foregoing it towards other malevolent regimes? Is North
Korea’s Kim Jong-Il really any less bent on acquiring nuclear
weapons than the Iranian mullahs? Is Hafez Assad of Syria any
less guilty of sponsoring international terrorist operations than
Rafsanjani and company in Iran? Is Beijing any less engaged in a
destabilizing arms build-up and aggressive behavior in strategic
international waterways than is Tehran?

The Bottom Line

Before coming to office, the Clinton Administration
talked about creating a National Economic Security Council
that promised to integrate U.S. economic and national security
interests. Regrettably, once installed, Mr. Clinton opted instead
for a National Economic Council — a change of name that appears
to reflect the change in emphasis: National security concerns
have clearly been given, at best, short shrift in Administration
deliberations about foreign trade and economic policy.

By now, however, it should be clear to President Clinton and
his advisors that “it’s economic security,
stupid.” The Center for Security Policy urges the
Administration to embrace the D’Amato-King-AIPAC initiative on
Iran. It also calls upon Mr. Clinton to recognize — and make
use of — that initiative’s central feature: affording the
United States the credible ability and precedent to deter others
from undercutting prudent economic embargoes on pariah states
like Cuba, Serbia, Libya and Iraq.