FacebookTwitterGoogle+RedditEmail

Agencies of Fear

The intrusion of the FBI into the 2016 presidential election may have come as a shock to most people, but it should not have surprised anyone who has spent time in the Oval Office.  Stretching back to the days of J. Edgar Hoover, presidents have learned, sooner or later, that while they may revel in the title of “Chief Executive,” their command of coercive bureaucracies, such as the FBI and the intelligence agencies, along with the military services, and others, is limited at best.

At worst, presidents may find these powerful institutions actively colluding with their political enemies.  Currently, we have credible reports of agents in the New York FBI Field Office defying their nominal superiors in the justice department to dig with zeal into the Clinton Foundation on the basis of nebulous leads from a partisan and largely discredited screed by a former Bush speechwriter.

Richard Nixon would have found this a familiar scenario.  Early in his presidency, he came to appreciate how little control he exerted over the assorted fiefdoms of the intelligence and law enforcement bureaucracies.  His solution was to set up a whole new police agency with extraordinary powers, the Drug Enforcement Administration, using the cover of a war on drugs, that would be under his direct control.  Recognizing this for the threat it was, the entrenched institutions struck back, crippling Nixon with media leaks, notably those from “Deep Throat”, deputy FBI director Mark Felt.

Sometimes the hobbling of executive power may emanate not from widely recognized killchain2instruments of power, such as the FBI, but from more obscure but nonetheless potent corners of the enforcement universe.  Thus the Obama Administration’s signature foreign policy achievement, the agreement to limit Iran’s uranium enrichment program, is currently being actively undermined by a little-known branch of the U.S. Treasury, OFAC, the Office of Foreign Assets Control, which supervises the enforcement of US sanctions around the world.

Under the agreement hammered out by Secretary of State John Kerry in July 2015, Iran agreed to curtail its nuclear program in return for the lifting of an array of economic sanctions imposed by the U.S. and other western powers in recent years.  The most onerous of these controls were those enjoining banks from doing business with nominated Iranian banks and other entities, with savage penalties levied on anyone who infringed the rules.  The effect has been to deter international banks from doing any business of any kind with Iranian banks, for fear of inadvertently triggering a billion dollar fine from the U.S. sanctions police.

Recognizing that the Iranians might lose faith in the agreement if promised rewards from the ability to trade freely with the rest of the world do not appear, the Obama Administration has taken steps to remedy the situation, or thinks it has.  Speaking recently at a ceremony in London honoring his role in negotiating the deal, Kerry announced that so long as banks make a pro forma effort to ensure they were not dealing with a sanctioned institution (there are still plenty of those) OFAC would not penalize them  even if it turned out they were wrong. “OFAC… has made it very, very clear that if you do due diligence in the normal fashion,” said Kerry, “and later it turns out it was some unenforceable entity that pops up, you will not be held accountable for that.”

Except that OFAC has different ideas.   As detailed by attorney Tyler Cullis, a specialist in sanctions regulations, writing in the blog SanctionLaw, OFAC states on its own website that the “normal” due diligence cited by Kerry is absolutely not “necessarily sufficient.” Instead, Treasury’s Acting Undersecretary for Terrorism and Financial Intelligence Adam Szubin, OFAC’s boss, has made it clear that anyone doing banking business with Iran had better exercise “enhanced (my emphasis) due diligence,” essentially meaning they have to prove their counterparties are pure as the driven snow, or they will get it in the neck.

The consequences are predictable; international banks will deem it smart to pay attention to the sanctions cops rather than the diplomat and steer clear of Iranian business, with consequent disillusionment over the deal in Iran and the neutralizing of a key administration success.

As Nixon might have said, par for the course.

More articles by:

Andrew Cockburn is the Washington editor of Harper’s Magazine.  An Irishman, he has covered national security topics in this country for many years.  In addition to publishing numerous books, he co-produced the 1997 feature film The Peacemaker and the 2009 documentary on the financial crisis American Casino.  His latest book is Kill Chain: The Rise of the High-Tech Assassins (Henry Holt).

January 16, 2019
Patrick Bond
Jim Yong Kim’s Mixed Messages to the World Bank and the World
John Grant
Joe Biden, Crime Fighter from Hell
Alvaro Huerta
Brief History Notes on Mexican Immigration to the U.S.
Kenneth Surin
A Great Speaker of the UK’s House of Commons
Elizabeth Henderson
Why Sustainable Agriculture Should Support a Green New Deal
Binoy Kampmark
Trump, Bolton and the Syrian Confusion
Jeff Mackler
Trump’s Syria Exit Tweet Provokes Washington Panic
Barbara Nimri Aziz
How Long Can Nepal Blame Others for Its Woes?
Glenn Sacks
LA Teachers’ Strike: When Just One Man Says, “No”
Cesar Chelala
Violence Against Women: A Pandemic No Longer Hidden
Kim C. Domenico
To Make a Vineyard of the Curse: Fate, Fatalism and Freedom
Dave Lindorff
Criminalizing BDS Trashes Free Speech & Association
Thomas Knapp
Now More Than Ever, It’s Clear the FBI Must Go
Binoy Kampmark
Dances of Disinformation: The Partisan Politics of the Integrity Initiative
Andrew Stewart
The Green New Deal Must be Centered on African American and Indigenous Workers to Differentiate Itself From the Democratic Party: Part Two
Edward Curtin
A Gentrified Little Town Goes to Pot
January 15, 2019
Patrick Cockburn
Refugees Are in the English Channel Because of Western Interventions in the Middle East
Howard Lisnoff
The Faux Political System by the Numbers
Lawrence Davidson
Amos Oz and the Real Israel
John W. Whitehead
Beware the Emergency State
John Laforge
Loudmouths against Nuclear Lawlessness
Myles Hoenig
Labor in the Age of Trump
Jeff Cohen
Mainstream Media Bias on 2020 Democratic Race Already in High Gear
Dean Baker
Will Paying for Kidneys Reduce the Transplant Wait List?
George Ochenski
Trump’s Wall and the Montana Senate’s Theater of the Absurd
Binoy Kampmark
Dances of Disinformation: the Partisan Politics of the Integrity Initiative
Glenn Sacks
On the Picket Lines: Los Angeles Teachers Go On Strike for First Time in 30 Years
Jonah Raskin
Love in a Cold War Climate
Andrew Stewart
The Green New Deal Must be Centered on African American and Indigenous Workers to Differentiate Itself From the Democratic Party
January 14, 2019
Kenn Orphan
The Tears of Justin Trudeau
Julia Stein
California Needs a 10-Year Green New Deal
Dean Baker
Declining Birth Rates: Is the US in Danger of Running Out of People?
Robert Fisk
The US Media has Lost One of Its Sanest Voices on Military Matters
Vijay Prashad
5.5 Million Women Build Their Wall
Nicky Reid
Lessons From Rojava
Ted Rall
Here is the Progressive Agenda
Robert Koehler
A Green Future is One Without War
Gary Leupp
The Chickens Come Home to Roost….in Northern Syria
Glenn Sacks
LA Teachers’ Strike: “The Country Is Watching”
Sam Gordon
Who Are Northern Ireland’s Democratic Unionists?
Weekend Edition
January 11, 2019
Friday - Sunday
Richard Moser
Neoliberalism: Free Market Fundamentalism or Corporate Power?
Paul Street
Bordering on Fascism: Scholars Reflect on Dangerous Times
Joseph Majerle III – Matthew Stevenson
Who or What Brought Down Dag Hammarskjöld?
Jeffrey St. Clair - Joshua Frank
How Tre Arrow Became America’s Most Wanted Environmental “Terrorist”
Andrew Levine
Dealbreakers: The Democrats, Trump and His Wall
FacebookTwitterGoogle+RedditEmail