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SANDERS: Use ‘jaw-jaw’ tactic – but give it some teeth

- The Washington Times - Sunday, July 11, 2010

ANALYSIS/OPINION:

The Obama administration — through its endless apologies for real and imagined American misdeeds and its resort to what Winston Churchill called "jaw-jaw" in all circumstances — has managed to only increase world tensions. It has created regional power vacuums by minimizing the U.S. role in leading the world's democratic forces.

No one discounts negotiation and conciliation, of course. Churchill at the height of the Cold War said that "jaw-jaw" — a series of negotiations — was preferable to "war-war." But in the confrontations with the mullahs of Iran and North Korea's communist rulers, diplomatic gobbledygook — inherited from the Bush administration — has failed to defuse the threat to peace. Although historical analogies should be eschewed — different times, different tempers, different tests — it's increasingly difficult not to draw analogies between the democracies' sacrifice of Czechoslovakia in the late 1930s and the Obama administration's support of U.N. policies that would effectively dismember Israel.

Churchill knew whereof he spoke. Throughout the 1930s, he was mocked for his campaign against false peace efforts. At the 1945 Yalta conference, Churchill (along with W. Averell Harriman, U.S. ambassador to Moscow) again was unable to convince his partner, friend and close ally President Roosevelt of the necessity of biting as well as jawing when dealing with the man FDR jocularly called "good old Uncle Joe." Concessions to Stalin were later to threaten the world with nuclear holocaust.

That's why it comes as a breath of reassurance that Washington has scored a round. This time it is about money — the lifeblood of terrorism.

Much of the terrorists' funding flows through traditional networks — hawala or hundi, based on ethnic, kinship and criminal ties as old as the Near East and South Asia caravan routes. But as the sums have grown larger, so has the sophistication of the terrorists' financial infrastructure — for example, Islamic welfare organizations have parallel "feeds" to the terrorists, as in the indicted American Holy Land Foundation for Relief and Development or the Turkish Insani Yardim Vakfi, or "Humanitarian Relief Fund." The U.S.-based fund supported Hamas, and the Istanbul outfit was the terrorist wedge in the recent "peace flotilla" confrontation with the Israelis. The vast evangelical operations of the Saudi fundamentalist clerics throughout the Muslim world often tail off into local terrorism.

But as international terrorism takes on heft, it is becoming more and more attuned to sophisticated finance — whether it be Pakistani and Afghan drug traffickers supporting jihadists or a "lone wolf" seeking ways to back his often dramatic operation.

The European Parliament, trying late in the game to assert its authority in the EU power structure, had blocked Washington's access to information on targeted financial transactions. The tussle was over the Society for Worldwide Interbank Financial Telecommunication (SWIFT), a cooperative of some 9,000 financial institutions in 209 countries. In false modesty, the outfit claims that SWIFT merely "enables its customers to automate and standardize financial transactions, thereby lowering costs, reducing operational risk and eliminating inefficiencies from their operations."

Without SWIFT, international banking as we know it could not function. And as with so many effective international institutions, it grew from U.S. origins. Because of those roots and the technological dominance of Silicon Valley, the cooperative is still dependent on American information technology, although it has its headquarters in Belgium.

After a game of hide-and-seek, the European Parliament has now acceded to permitting American officials to continue to scrutinize SWIFT transactions. This is tacit admission of the former relationship, despite a new agreement to aid the organization (and the Europeans) toward "independence." Not only do the Europeans not have the ability to sift data that American technology provides, but, as the Financial Times reported, only recently was its data storage moved out of the United States.

One can only hope that the Obama administration will maximize this tool. Recent U.N. and intensified American sanctions seeking to force Iran to back away from nuclear weapons will be effective only if they are enforced not only among the major financial centers but through threats of secondary and tertiary boycotts. Front organizations for Iran's Revolutionary Guards in the United Arab Emirates and members of the Iranian diaspora will attempt to exploit the more stringent sanctions for even more profit.

But there is another poignant political lesson in this whole affair. If there were ever need for proof of America's power when it chooses to exert it — even with its current gigantic economic difficulties — it is this little brush with sincere European advocates of privacy and their nefarious allies who would protect financial greed. (Even the vaunted Swiss banks recently have had to let Washington look for tax dodgers in their numbered accounts.)

Frequently, as in the case of threatening Chinese banks operating as North Korean fronts in Macao or in forcing oil giants like Mitsubishi, Total and BP to halt desperately needed investment in Iran, these financial strictures can be powerful weapons. But it takes political will and realism about the U.S. role to use them.

Sol Sanders, veteran foreign correspondent and analyst, writes weekly on the convergence of international politics, business and economics. He can be reached at solsanders@cox.net.

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