Seeking to restore the Iran nuclear accord, President Biden cannot afford to replicate one of President Barack Obama’s biggest mistakes. Biden must not ignore the role of the Islamic Revolutionary Guard Corps, or the IRGC, in the Iranian economy.
I note this because Secretary of State Antony Blinken will appoint Rob Malley, an Obama administration veteran and head of the International Crisis Group, to be his Iran envoy. Malley’s appointment suggests that while Biden may talk like a centrist, his team is set to take a more radical tack in its policy pursuits. Liberals might celebrate, but Blinken makes a mistake in not seeking a more solid foundation to tackle a very difficult problem set. Let’s be clear about something else. To construct Malley’s choice as an endorsement of diplomacy and castigate his critics as anti-diplomacy is a dangerous straw man: The issue is not that conservative analysts oppose diplomacy but, rather, that many conservatives believe that diplomacy naively crafted could hasten conflict.
Whatever one’s assessment of the 2015 Iran nuclear accord, it is undeniable that loosening sanctions and better resourcing the Islamic Republic enabled it to increase its regional aggression. Conversely, “maximum pressure” has starved Iranian proxies such as Lebanese Hezbollah of cash. That takes us back to the IRGC.
To understand the problem, it is important to understand the IRGC’s origins and its strategy for dominating Iranian society. Ayatollah Ruhollah Khomeini formed the IRGC against the backdrop of Iran’s 1979 revolutionary turmoil. It became a critical component of Iran’s defense after the September 1980 Iraqi invasion and consolidated an elite status during the eight years of “holy defense.” Khomeini’s acceptance of a 1988 ceasefire created an existential challenge for the IRGC: If it merely went back to its barracks in fealty to Iran’s political leaders, it might lose the elite status to which it had grown accustomed. The IRGC leaders instead decided to create an independent power base.
In a crafty move, IRGC leaders took their equivalent of the Army Corps of Engineers and began investing in the civilian economy. The impact has been profound. To understand the influence of Khatam al Anbiya, the IRGC’s economy wing, picture (without moral equivalence) the Army Corps of Engineers merged with Exxon, Chevron, Walmart, Boeing, Northrop Grumman, Ford, KBR, Halliburton, Bechtel, Citi, and Bank of America. Imagine also that the resulting conglomerate neither paid taxes nor hesitated to call military enforcers to intimidate or shut down any potential competitors. Thirty-three years after the Iran-Iraq war’s end, the IRGC controls up to 40% of Iran’s economy, including all major industries and interfaces for trade.
To compare Iran’s budget with occasional announcements of nonbid, single-source contracts is to suggest that up to 90% of the revenue the IRGC receives is off-books. Neither Iranian Foreign Minister Mohammad Javad Zarif nor the Iranian Parliament can force the Revolutionary Guards into a box, even if they were inclined to do so. There is no magic formula when it comes to Iran, and both liberals and Iran hawks do themselves (and ordinary Iranians) a disservice by papering over the country’s complexities.
If Biden, Blinken, and Malley wish to succeed, they must first address how they can act without actually playing into the IRGC’s hands. Iran’s economy won’t be an even playing field if and until policymakers address the IRGC’s death grip over that economy. Traditional carrot-and-stick approaches or calculations based on flawed understandings of the reform vs. hard-line dichotomy will backfire tremendously. Indeed, they could actually catalyze conflict.
Michael Rubin (@Mrubin1971) is a contributor to the Washington Examiner’s Beltway Confidential blog. He is a resident scholar at the American Enterprise Institute and a former Pentagon official.
