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BERMAN: Taking aim at Iran’s Revolutionary Guards

U.S. must check growing economic power of privileged military unit

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The foiled Iranian Revolutionary Guard Corps (IRGC) plot to assassinate the Saudi ambassador to the United States, which was made public by the White House on Oct. 11, amounts to a dramatic escalation of the West's confrontation with Iran. In the wake of the disclosure, the Obama administration has talked tough, pledging new diplomatic pressure against Iran and emphasizing that "all options are on the table" as it contemplates its response.

But what can actually be done about Iran's clerical army and the radical regime that enables it? The most ready answer lies in the prominent role the IRGC now plays in the Iranian economy, which can be exploited by Washington and its allies in the service of a new economic offensive against the Islamic republic.

The groundwork for such a campaign was laid back in October 2007, when the George W. Bush administration took the unprecedented step of listing the IRGC as a "specially designated global terrorist" under U.S. law. That designation marked only the second time in modern history that Washington had blacklisted the favored military of another nation. (The first was during World War II, when the Roosevelt administration explicitly singled out Hitler's Waffen SS for punitive action.) It was also potentially far-reaching, providing Washington with the authority to target the various companies and commercial entities controlled by the IRGC and to begin to systematically exclude them from international markets.

To date, though, comparatively little has been done on that score. While some sanctions have been levied by the Treasury Department against IRGC-owned businesses, interests and personnel, these restrictions are still far from comprehensive. Europe, too, has not done nearly enough to exclude IRGC-linked enterprises from operating in the eurozone. Nor does the showpiece of American sanctions efforts - the Comprehensive Iran Sanctions, Accountability and Divestment Act signed into law by President Obama last summer - deal extensively with clipping the IRGC's economic wings. Underlying these lapses is a troubling reality: Neither the United States nor its allies seem to have an authoritative picture of the IRGC's global economic presence. Because they don't, economic measures against the Iranian regime's most powerful economic actor have remained limited.

Yet the scope of the IRGC's economic footprint is both immense and readily discernable. In recent years, the Guard Corps has emerged as a major economic force within the republic, in command of numerous construction, industrial, transportation and energy projects as well as commercial enterprises, valued in the billions of dollars. Indeed, just the IRGC's construction arm, known as Khatam al-Anbiya, is estimated to employ 40,000 people and hold some 1,700 domestic contracts, as well as having significant stakes in major projects abroad, including in post-conflict Iraq.

All told, when tallied in 2007, the IRGC was estimated to have a cumulative net worth of some $12 billion. Additional commercial deals since then - facilitated by the government of President Mahmoud Ahmadinejad, himself a former Guardsman - have expanded this empire still further. The aggregate result has been what some experts have termed a "creeping coup d'etat" in which Iran's privileged clergy, long the economic center of gravity within the country, has gradually been eclipsed by its own ideological muscle.

Policymakers in Washington have become increasingly aware of this fact. Last year, Secretary of State Hillary Rodham Clinton, in a speech before the Council on Foreign Relations, famously described Iran as "a military dictatorship with a ... sort of religious-ideological veneer." Yet, so far, this recognition has not translated into a meaningful change in how the United States applies pressure on the Iran.

It should. A more aggressive American approach that penalizes multinationals who knowingly engage in commerce with the IRGC can help chill investments that enrich Iran's most dangerous global actor as well as place serious diplomatic pressure on the regime in Tehran. So could the application by Europe of travel bans, asset freezes and other penalties that make it significantly more difficult for IRGC officials and members to operate freely abroad.

A requisite first step, however, is for the United States and its allies to map the width and breadth of the IRGC's economic empire - and then to move decisively against it. The foiled October terror plot only serves to confirm just how high the potential costs of not doing so could be.

Ilan Berman is vice president of the American Foreign Policy Council.

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