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Independence Day Weekend

Americans celebrate our independence with annual traditions.

Based on the current state of our country, which item best represents what you will be doing this holiday weekend?

Modernize my home to be energy efficient according to O’s standards
Lowering the asking price on the sale of my home. AGAIN
Writing another letter to my Congressional Rep – that I know they won’t read. AGAIN
Tuning out ANY coverage of Michael Jackson
Scheduling any potential surgeries I think I may need
Updating my family’s passports
Using Hamburger Helper for my July 4th BBQ
Going to warehouse store to buy normal incandescent light bulbs – in bulk
Tuning out ANY coverage of “the one”

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Four Radical Chinese Muslims Transferred to Bermuda

Four Chinese Uighers (radical Chinese Muslims) were recently transferred to Bermuda. Do you think it's a good idea to release Gitmo detainees to idyllic vacation retreats?

Yes
No
Not Sure

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June 9, 2008

Exclusive: CRC OPEN SOURCES: Doing Business with Terror Inc.

W. Thomas Smith, Jr., CRC Open Sources

Recently, I wrote a piece, Doing Business with the Devil (Human Events, June 2, 2008), in which I discuss the fact that American-owned General Electric continues to do business with Iran despite the fact that there has long been a trade embargo on that country (Iran is a designated "state sponsor of terrorism," and its Islamic Revolutionary Guard Corps is a designated "foreign terrorist organization.").

GE has stated publicly the company would no longer seek new business in Iran after 2005. It's now 2008, and GE is still in Iran and doing business. Company execs have told me personally that GE will be out by the end of June. That remains to be seen.

According to the U.S. Treasury Department's Office of Foreign Assets Control:

"U.S. persons may not trade in Iranian oil or petroleum products refined in Iran, nor may they finance such trading. Similarly, U.S. persons may not perform services, including financing services, or supply goods or technology, that would benefit the Iranian oil industry."

But Russell Wilkerson, GE's director of financial communications, told me last week, "We are down to a couple contracts with global oil and gas companies only."

Indeed, as GE also disclosed in 2006 - and as I reported at Human Events - the company has not only been selling and/or distributing "power generation systems and parts, oil & gas equipment, power control/supply and lighting products in Iran," but they have been doing business both directly and indirectly with the Iranian government.

LAWYERLY LOOPHOLES

How does GE get away with it? All sorts of legally protected things that non-lawyer types would have a near-impossible time of getting their heads around like various trade loopholes, "exceptions" for who-knows-what, and "cutouts" (foreign-based subsidiaries).

Christopher Holton, a vice president with the Center for Security Policy and who directs the CSP's Divest Terror Initiative, also told me that what GE is doing "may not be violating the letter of the law, but it's certainly violating the spirit of the law."

As I reported, "the problems are not only with publicly-disclosed business operations, but the extent to which dark business deals are being made beyond public scrutiny."

I'm not saying there is any criminal intent on the part of any American company doing business in Iran (and as surprising as it may seem, there are several U.S. companies there), but I am saying that global companies have a responsibility to ensure that they follow the letter of the law, follow the spirit of the law, and make damn sure that - when it comes to dual-use products (civilian products that might also have military application) -- they are responsibly-selling to those foreign companies who themselves would not turn around and sell those American dual-use products to the sworn enemies of America like Iran.

This critical responsibility of ensuring that the end-users of "sensitive" dual-use products are not bad guys - who could kill American soldiers -- must be demanded of American companies without exception. If exceptions are made, we will continue to experience unsavory trade incidents like the recently reported incident involving GE and German-based technology firm, Draeger.

THE GE-DRAEGER-AZODI AFFAIR

An article last month in Deutsche Welle, reported that Draeger has come under fire for delivering sensitive surveillance software - purchased from GE - to Iran. According to the report and others, Draeger hired an Iranian-European go-between, Mr. Sasan Azodi, to purchase the software from GE in the U.S. and have it delivered to Draeger in Germany for testing purposes on a Draeger-developed oil-pipeline security system. The software was not supposed to be shipped to Iran. But for some reason, it ended up in the hands of Iran's Ministry of Oil.

Everyone has been passing the buck as regards where the responsibility lies in this sale of military-grade software to Iran. Draeger is pointing the finger at Azodi, an Iranian-born businessman (currently living outside of Iran). I have been in frequent communication with Azodi, who tells me - and has provided supporting documentation - that he "had nothing to do with the software being shipped to Iran, no personal knowledge that this was what was going to happen." He says that not only did Draeger "ship the software" without his knowledge, but they are "trying to avoid responsibility" and German customs are all too-frequently turning a blind eye to the products being shipped by major German companies like Draeger.

Azodi adds, "Iran is threatening me and my family." Not surprising. Iran obviously wants such shipments to continue. And the country certainly stands to benefit if -- as Azodi says - there are lax custom standards on the part of specific European countries.

WHAT ABOUT GE?

According to Holton, "GE was supposed to make sure they knew where that software was going before they sold it. So now if American special operations forces ever find themselves on a mission to seize an Iranian pipeline or even a nuclear plant, they will also have to deal with a sophisticated security system made in America."

Since my story was published last week, I've received queries from readers asking me if - on the flipside - we are buying oil from Iran. The answer is no.

THE DEVIL IN THE DETAILS

Iran, which sits on the second-largest reserves of both oil and gas in the world, is the fourth largest exporter of oil, and it earned $70 billion last year in crude oil exports (The country's top crude-oil customers include Japan, China, India, South Korea, and Italy). Frequently threatening to wipe Israel off "the face of the earth," Iran is involved in an ambitious nuclear-development program and is heavily involved in Terror Incorporated: The country's Islamic Revolutionary Guard Corps and proxy army, Hezbollah, are training and equipping Iraqi Shiia militias, and directly attacking U.S. forces in Iraq. Iran provides support to the Taliban in Afghanistan. Iran funds and provides weapons and operational support to terrorist groups like Hezbollah (at least $one-billion, annually), Hamas, the Popular Front for the Liberation of Palestine, and Palestinian Islamic Jihad.

U.S. sanctions, in different forms, have been imposed against Iran for more than two decades.

W. Thomas Smith, Jr. is director of FSM's Counterterrorism Research Center.

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