Turning point: Khatami's election Q: When I first interviewed you two years ago, you mentioned that in order for U.S.-Iran relations to improve, something dramatic needed to happen to change perceptions about Iran. Do you think Khatami's election is it? A: Very much so. I think Khatami's election had a tremendous impact. It was a turning point. Clinton's reaction to Khatami's election was the first positive response toward Iran by any senior U.S. official in years. They saw that things can change in Iran and people do have a voice. The ice began to crack. There had been five years of unrelenting hostility by the U.S. government. Hostility toward Iran had not been constant before Clinton. This whole business of demonizing Iran all came with Clinton. Now the bureaucracy is shot through with individuals committed to hostility. When senior officials suggest something about improving relations, these people counter-attack. They're not going to go away easily. And you also have the Congress which has passed several sanctions laws that are in the books. They're not going away and reversing them is a slow and difficult process. (Back to topics) * Mojahedin ban: Clear signal It's ironic that despite Clinton's positive comments after Khatami's election and despite a clear signal from the State Department, which for the first time designated the MKO (Mojahedin Khalq) as a terrorist organization, the Administration is being pulled in different directions. The Iran issue is in such a hole that climbing out is very difficult. There's room for maneuver, but not much. I don't want to overstress the impact of Khatami's election but this event made some individuals within the Administration say that the issues between two countries are worth a fresh look. (Back to topics) * Things can go wrong; al-Khobar Still, things can go wrong. The al-Khobar bombing investigation in Saudi Arabia is still pending. If the Saudis don't implicate Iran, the U.S. is unlikely to blame Iran. But there's the possibility that Iran will be implicated, which will put things in a downward spiral. On the other hand, Khatami's government could also run into internal trouble and that could raise serious obstacles in the way of improving relations. (Back to topics) * U.S. not a priority for Iran Q: As far as Iranians are concerned, they don't seem to be anxious to improve relations with the U.S. Is this your impression as well? A: Iran is a mirror image of the U.S. Iran is also boxed in. There are high domestic political costs in dealing with the U.S., as there are for Americans dealing with Iran. Neither side wants to take the first step. The Iranians have learned to live with the sanctions, which are not as onerous and threatening as expected. They have other fish to fry. Their foreign policy priorities seems to be to establish better ties with Arab states in the gulf and Central Asian neighbors, then Russia, China, Japan, Korea and Europe, as well as better relations with U.N. agencies. The U.S. is pretty far down the list. They're not hurrying to resolve issues with Washington. (Back to topics) * Engaging in private diplomacy Q: Given that there is little chance of a diplomatic breakthrough, do you think establishing commercial ties would help rebuild Iran-U.S. ties? A: That was Rafsanjani's big mistake. He was hoping that trade would help relations with the U.S. With all these sanctions laws in place, commercial prospects are a non-starter. I don't see the commercial strategy as a very good one. I think private diplomacy is better a option. There can be contacts with Iranian academics and intellectuals where certain issues can be discussed and trust can be built. And in time things can change. This is similar to the process that brought Palestinians and Israelis together in Oslo. First there was private diplomacy and then eventually it lead to a breakthrough on the official level. I think in this process, more American academics should go to Iran on a private basis and more Iranians should come here. And Gulf2000 is very much committed to this exchange. (Back to topics) * U.S. reviewing costly sanctions policy On the other hand the State Department announced a couple of days ago that they're doing a major review of all sanctions policies, and clearly, if I'm reading it correctly, they're going to take a close look at the tremendous difficulties which the Helms-Burton sanctions act has caused with our allies. This is clearly a new thinking within the Clinton Administration -- not because of Iran, but because ILSA (Iran, Libya Sanctions Act) and the Helms-Burton Act, which threatens non-U.S. citizens with sanctions if they do business with Iran, have simply caused outrage among our allies. If the Administration does try to act based on these laws, not only will the Europeans most likely retaliate with their own sanctions, but they will also have a very good case in the World Trade Organization in declaring these U.S. laws a violation of international trade rules. There are going to be more deals like the one Total just made with Iran for oil and gas development and the Helms-Burton Act especially will be an unending source of irritation with our allies. So clearly, that's why the State Department is reviewing sanctions policies. Over the past four years, the U.S. has imposed sanctions on various countries 61 times. That's double the number in the previous 80 years. The losses to U.S. businesses is huge. (Back to topics) * Businesses against sanctions Q: Do you think business groups like USA Engage will be able to have an impact on removing these sanctions? A: I think in the beginning, the business community was not going to challenge these laws because first of all they did not have much of an economic impact, and secondly they did not want to be seen as questioning U.S. national security interests. But now, there are so many laws and such huge economic losses that businesses have begun to organize. USA Engage now includes not all but most major U.S. corporations and in time they will have an impact. They are already backing bills in Congress which demand that before any new sanctions are imposed, there must be a detailed cost-benefit study to see if it's worth going ahead. Stuart Eizenstat, the State Department's under secretary for economic affairs, testified before Congress a few weeks ago and provided astonishing figures on the loss to the U.S. economy caused by sanctions. He's the man in charge of dealing with the Europeans as far as the sanctions go, so he's exposed to their impact. Imposing sanctions used to be the favorite indoor sport in Congress. It was fun. They passed laws left and right without seeing the consequences, and the White House went along. But now they see the costs involved. (Back to topics) * Developing contacts Q: From your contacts with Iranians academics, have you detected any change of attitudes? A: I haven't really seen a tremendous change either way. I have always been able to have comfortable conversations with Iranian academics and intellectuals. The difference now is that we are developing these contacts. I never found Iranians to be reluctant in talking to me. Certainly I don't speak for the American government. It is only through Gulf2000 that we've been building personal relationships. (Back to topics) * Acceptance of need for change/Oil interests Q: Just a couple of years ago you were among the very few who believed in rebuilding relations with Iran. But now it seems all top U.S. foreign policy experts agree with you, most recently Kissinger. A: A huge array of experts and former officials, republican and democrat, now believe that U.S. policy toward Iran should change. I would like to think that I and a few others brought about this new thinking, but it's not true. These individuals have done their own studies independently and come to this conclusion. A lot of them are consultants for major oil interests in Central Asia and elsewhere in the region. Q: Which major oil interests are you representing?! A: None! I wish somebody was paying me for this! But I don't want to leave the impression that this change of view has come about because of these individuals' personal interests. It's simply that through their work, they have run up against the fact that current policies against Iran are not good for U.S. interests. I mean look at people like Richard Haass. He's the director of the Brookings Institution. It's well known that he has political ambitions and is interested in a top foreign policy position in a future republican administration. He has written an article in the current issue of Foreign Affairs called "Sanctions Madness." The fact is that a lot of people were against sanctions policies from the start but it was seen as a power game and they were willing to play along. Well now that they see the costs, they see it's not a game anymore. (Back to topics) * Nuclear weapon program: Talk to Iran Q: Then if you think U.S. policy toward Iran should change, what about all the concerns about Iran's perceived nuclear weapon program, support for terrorism, etc.? A: Well, let's take the nuclear issue, because it's the most intractable issue we have with Iran. Obviously if the U.S. wants to have a significant presence in the region, a nuclear-armed Iran would bring about great dangers. Most officials in the U.S. think there's nothing that can be done to stop Iran's nuclear program other than sanctions. But I think something can be done. The two sides can talk. Look at North Korea. If there was ever a rouge state that was truly crazy, it was North Korea. Through the efforts of various individuals like Jimmy Carter, the U.S. was able to reach a deal with North Korea that either stopped or diverted its nuclear weapons program. A lot of Iranians, even high-level officials are not at all committed to a military nuclear program. So there's something to talk about. Sanctions, on the other hand, have the reverse effect. It challenges Iran to go on with what it's doing and has no real impact. But if you engage Iran you can expect results. This is a classic case which shows current U.S. policy is inadequate. We have no support from our allies in implementing sanctions and it is unrealistic to think the we can stop Iran this way. What we can do is to use our leverage in a rational discussion in which the interests of both sides are taken into consideration. This will be far more effective. From my contact with Iranians. This is not an unrealistic prospect. Instead of shouting at each other we can sit down and talk and sort things out. (Back to topics) * Peace process/Hizbollah/Hamas As far as Israel and Iran's support for Hizbollah, there's not much that can be done to change Iran's opposition to Israel. Iran has an ideological commitment in opposing Israel. But Hizbollah is a different matter. Iran's support for Hizbollah will continue as long as Israel remains in Lebanon. But once the Israelis leave, I think the issue can be resolved quite quickly. Iran's support for terrorist activities carried out by Hamas is a matter of dispute. Iran claims that it's support for Hamas is no different than the Saudi support. They give money for clinics and medical needs, but that money is used for terrorism. Iran has a different view on this. So it's a matter of dispute. As for the peace process, at this point Iran feel vindicated. They have been saying all along that the Israeli-Palestinian deals are a sham and that Israel will not keep its promises. With what Netanyahou has done so far, Iran's position is getting more support from the Arab states. The Arabs are telling Iran, "You were right about the peace process." I don't think they're right but at the moment the U.S. does not have a good case against Iran's position. (Back to topics) * Confidence-building In any case, I think there are areas where both sides can talk about. They can start with confidence-building measures. For instance, the U.S. wants Iran to stop its surveillance of U.S. sites. If this is going on, Iran can put a stop to it. Both sides can take confidence-building steps. It will not happen any time soon but that should be the objective. We're losing time and missing opportunities.
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