Upon taking over as secretary of state, one of the first moves Antony Blinken made was to revoke the Houthi’s terror designation. In the wake of their delisting, the Houthis embarrassed Blinken by ratcheting up their attacks on both Saudi and Emirati civilian infrastructure.
Blinken, it seems, has not learned the lesson. Reports from Vienna suggest a renewed Iran nuclear deal is close. Leaks suggest that the United States is prepared to reverse all Trump-era sanctions.
There would be one winner from any such deal, and it would not be the U.S., the Iranian people, or nuclear nonproliferation. On April 8, 2019, the State Department designated the entirety of Iran’s Islamic Revolutionary Guard Corps as a foreign terrorist organization. To designate only its elite Quds Force unit would be to absolve the broader organization. If Greenpeace put bombs on buses, it shouldn’t matter what they did with the spotted owl — they’d still be a terrorist group.
Like former President Donald Trump or hate him, his administration’s designation of the entire Guard was a brilliant move. It showed understanding, at least on Secretary of State (and former CIA Director) Mike Pompeo’s part, of Iran’s inner workings.
After the Iran-Iraq War, the Guard began investing in Iran’s civilian economy in order to acquire a financial base independent from the Iranian government’s budgetary process. Thirty-five years later, the Guard’s economic wing, without moral equivalence, is akin to what would happen if the U.S. Army Corps of Engineers merged with Bechtel, KBR, Halliburton, Walmart, Boeing, Northrop Grumman, ExxonMobil, Chevron, and Ford, and then used the military might of the U.S. to force competitors out of business.
The Guard today controls up to 40% of the Iranian economy and a larger share over import-export, construction, and manufacturing. The revenue streams from these businesses, the no-bid contracts the Iranian government awards them, and the smuggling the Guard controls mean that the organization’s real budget may be an order of magnitude higher than the official budget.
By designating the entire Guard, any foreign company doing business with one of the Guard’s businesses could become liable should the Guard’s victims seek compensation. This created an incentive for European companies to do their due diligence and ensure that their partners had no malevolent affiliations. Certainly, preventing investment in the Guard not only helped undercut terror finance, but it also benefited ordinary Iranians since Guard-owned companies are infamous for ignoring labor laws and defaulting on their workers’ salaries.
I spent early December 2020 in portions of southern Lebanon controlled by Hezbollah, which was in the midst of a crisis: Their money was drying up because the Guard could no longer afford to subsidize them fully. As the group switched salary payments from U.S. dollars to the nearly worthless Lebanese pound, Hezbollah’s leadership was learning that many of its rank-and-file had joined for the money and privileges rather than the ideology.
Unfortunately, President Joe Biden and Blinken are snatching a counterterrorism defeat from the jaws of victory.
Michael Rubin (@mrubin1971) is a contributor to the Washington Examiner’s Beltway Confidential. He is a senior fellow at the American Enterprise Institute.
