ITS THE ECONOMY STUPID ! Why the Revolutionary Guard Named as a Terror Group

I have heard some liberal commentators complain about the State Department's action naming Iran's Islamic Revolutionary Guard as a terrorist organization . Why would the Bush administration declare the "Elite Army Troops" of Iran terrorists? Why the hollow symbolic gesture?

The real name of the group is Army of the Guardians of the Islamic Revolution (AGIR). It s separate from, and parallel to, the regular Army, Navy, and Air Force of Iran. It is equipped with its own ground forces, navy, air force, intelligence, and special forces. It also controls the basij militia, which has a potential strength of eleven million, although the Basij essentially consists of 90,000 regular soldiers and 300,000 reservists. For more about Basij click here.

Over the past few years AGIR has become an economic force also--it is very involved in construction across the Islamic world and in Iran itself (including Iran's Nuclear program). By declaring AGIR as a terrorist organization, the US can not only freeze their assets but the assets of companies that do business with them. In short the United States can ramp up the economic sanctions against Iran without going to the Do-nothings in the UN.

The Sopranos of Iran

By Kenneth R. Timmerman

FrontPageMagazine.com | 8/17/2007

Some have described them as the Corps of Engineers of Islamic Revolutionary Guard Corps (IRGC).

If so, the Rev. Guards’ Khatam-ol-Anbia conglomerate is more akin to the Corps of Engineers run by the Sopranos.

An estimated 1/3 of the Rev. Guards 120,000 troops work for Khatam-ol-Anbia, digging underground bunkers, hiding away nuclear materials, building roads and schools (and more underground bunkers) in South Lebanon.

Increasingly, they also getting into the banking business in northern Iraq, and are horning into major construction and development projects such as the Tehran metro and the South Pars natural gas field development project.

It is because of these last activities that the Bush administration decision to designate the IRGC as a “global terrorist” entity, as leaked to the Washington Post this week, could have a tremendous impact on Iran’s ability to lure Western companies into its embrace.

While the immediate financial impact of designating the IRGC under Executive Order 13224 will be little or nothing because the IRGC has no holdings in the US, the political impact could be immense, says former Treasury Department analyst Jonathan Schanzer.

“By designating the IRGC we are sending a message to the world that we are looking at an arm of the Iranian government and saying it is a terrorist entity. That is significant,” Schanzer tells me.

“The goal of this type of step is to scare off the foreign oil companies, send them a clear signal that they have to get out now, jump immediately, pull their funds out,” he believes.

Schanzer knows the subject inside and out. As a former deputy to Undersecretary of Treasury Stuart Levy, he was involved in drafting earlier sets of financial sanctions against Iranian banks and other entities, that have hugely impacted Iran’s ability to access international capital markets and conduct business in U.S. dollars.

He believes that this type of sanction has a “resididual effect” that will impact “any entity providing funds to the IRGC or doing business with them,” making them potentially liable to be designated by the United States as a terrorist sponsoring organization as well.

That is one powerful tool, and it will hit some of the world’s biggest oil companies head on.

U.S. officials are not yet commenting officially on the proposed designation, but unofficially have been telling reporters that the move came as a result of a growing frustration within the administration with the lack of effectiveness of the United Nations sanctions on Iran.

“Time is short,” one administration official told me.

The administration is clearly counting on the fear factor. By designating the Revolutionary Guards in its entirety, the U.S. is hoping to make foreign companies doing business with Revolutionary Guards companies think twice about the wisdom of continuing that relationship.

“How much risk are they willing to accept? Are they willing to wake up one morning and find that their U.S. bank accounts have been frozen? Or their U.S. subsidiaries shut down? We want them to be forced to make a choice between doing business with the IRGC, and doing business with the rest of the world,” an administration source said.

Over the past three years, the IRGC has moved from being a purely military organization, parallel to the regular armed forces, to being a military-economic cartel, similar to the People’s Liberation Army in Communist China.

In 2004, when the Iranian government awarded the management of Tehran’s new airport to a Turkish company, the IRGC showed its clout by occupying the airport and preventing it from opening, until the contract was cancelled and given to one of its own companies.

Since former Revolutionary Guards officer Mahmoud Ahmadinejad took power in August 2005, the business activities of the IRGC have expanded dramatically.

The biggest and best known IRGC commercial enterprise is Khatam-ol-Anbia (Ghorb). The “Ghorb” part means “base,” just as “al-Qaeda” means “base.” Khatam-ol-Anbia itself means “The Last Prophet,” a term used to designate the Prophet Mohammad.

“Khatam ol-Anbia (KOA) handles billions of dollars of industrial, construction and oil projects in IranIran, the Tehran metro, and have close ties to Chinese oil companies.” and elsewhere,” a former Iranian military officer told me. “They are involved in huge oil exploration projects in southern

This source, who was able to quiz Rev. Guards officers in Tehran about KOA’s activities, also confirmed their involvement in construction and banking activities in northern Iraq, and extensive involvement on the ground in Lebanon, where they were responsible for building the underground bunkers used by Hezbollah to store the Iranian and Syrian-supplied rocket launchers they used against Israel during last summer’s war.

KOA hit the big time last year, when they won a series of no-compete bids with the Iranian government, including a $2 billion deal to develop parts of the South Pars gas field, a separate $1.3 billion contract to build a pipeline, and a $1.2 billion deal to build the 7th line of the Tehran metro.

Once Khatam-ol-Anbia (KOA) gets the business, it turns around and subcontracts to mostly foreign companies, said Dr. William Samii of the Center for Naval Analysis. “It doesn’t do much of it itself.”

In Feburary, for example, KOA officials publicly signed a $500 million contract with Daelim of South Korean to produce liquefied natural gas from the South Pars gas fields.

The list of companies working on the South Pars project is long, and includes oil industry giants such as Total and Technip of France, Russia’s Gazprom, Italy’s ENI, Petronas of Malaysia, LG of South Korea, and Toyo Engineering of Japan.

Once the U.S. designation becomes official, this means all them potentially could face being designated as terrorist entities themselves unless they severed business ties with KOA and other IRGC entities.

“Our objective is that nobody should be doing business with them,” an administration official said.

“We will take a very serious look at any business anywhere in the world that is doing business with the IRGC and force them to make a choice. We’re going to make it as hard as possible for them to continue doing business with the IRGC.”

Ahmadinejad and IRGC leaders wanted KOA to get involved in oil and gas field development to break the back of the Iranian “oil mafia,” Dr. Samii told the American Enterprise Institute at a recent conference.

“Who is the oil mafia? Hashemi Rafsanjani and his associates, by implication,” he added.

Samii told the charming story of how KOA managed to wrest the ownership of a Romanian oil rig in the Persian Gulf away from a company called Oriental Oil, which was owned by people close to Hashemi-Rafsanjani.

But neither KOA nor Oriental Oil had ever paid the Romanians for the oil rig. Last October, when the Romanians tried to get it back, “suddenly the IRGC Navy showed up, boarded the oil rig and took it over,” Samii said.

“So it shows that Khatam-ol-Anbia, despite its protestations of being a purely commercial enterprise, is willing to work with the armed aspects of the revolutionary guards to pursue its economic objectives,” he added.

If the U.S. Treasury won’t get you, the Iranian Sopranos in the Rev. Guards will.

Caveat emptor, as they say.