A recent Department of Defense memo acknowledged that the United States does not have an effective long-term strategy for countering Iran’s pursuit of nuclear weapons. According to a New York Times article, the memo drafted by Secretary of Defense Robert Gates served as a “wake-up call” to government officials.
Fortunately, the absence of a comprehensive government strategy has not stopped the American people from taking action independent of the government to curtail Iran’s nuclear ambitions. In fact, Americans are actively supporting a strategy of increasing Iran’s economic isolation by pressuring multinational corporations to stop doing business with the Iranian regime.
This action has taken the form of efforts by states, like New Jersey, to divest their pension funds from holdings with state sponsors of terror, including Iran. It also takes the form of grassroots advocacy campaigns by private citizens. In the past year, Fortune 500 corporations such as Caterpillar, GE, Huntsman, Siemens, and KPMG have ceased or scaled down existing Iranian contracts as a result of pressure from concerned Americans and advocacy groups like United Against Nuclear Iran (www.uani.com).
This kind of economic pressure is changing Iran’s perception of the costs and benefits of pursuing its current policies. When corporations stop operating in Iran, the regime is denied access to technology that it uses to facilitate the development of its nuclear enrichment and petroleum industries — areas that are largely controlled by the Islamic Revolutionary Guards Corps, the dominant ideological entity within Iran’s military.
Iran’s economic isolation and lack of access to world financial markets will exacerbate Iran’s reliance on its increasingly obsolete energy sector for export revenue to fund its activities. Over-reliance on oil and gas revenues will make Iran even more vulnerable to both the vagaries of the world oil market and the effects of additional economic sanctions. Over time, isolation from global financial markets will make Iran’s rising current account deficits unsustainable, heightening economic pressure on the regime and inflaming an Iranian population that is already chafing under a repressive political system, a stagnant economy, and the stigma of living in a pariah state.
Iran is the world’s most active state sponsor of terrorism. It also supports anti-United States insurgents who kill American GIs in Iraq and Afghanistan. Despite all this, a number of corporations continue to do business with Iran. Incredibly, some of these same firms also do billions of dollars of business with the U.S. government. Federal agencies awarded over $107 billion during the past decade to companies with business interests in Iran. Over two-thirds of that money went to companies that operate in Iran’s energy sector — a major source of revenue for the IRGC.
A case in point is the example of Honeywell. Honeywell has received over $12.9 billion in U.S. federal contracts and grants over the past decade. Nevertheless, a Honeywell subsidiary is currently engaged in a project at Iran’s Arak oil refinery that could triple Iran’s gasoline production. Honeywell’s decision to continue its work on the Arak refinery flies in the face of overwhelming bipartisan support in the U.S. Congress to economically isolate Iran’s energy industry and undermines U.S. strategic interests vis-a-vis Iran.
As their state has been home to Honeywell’s global headquarters since 1999, the good people of New Jersey have special reason to take offense at Honeywell’s decision. It is doubtful that New Jerseyans appreciate hosting a company that includes “support for state sponsors of terror” in its business plan.
Honeywell’s refusal to follow the lead of other American companies like Huntsman, Caterpillar, and GE is out of step with the prevailing view among Americans that corporations should not put short-term economic interests ahead of U.S. national security. It is the height of irresponsibility for corporations to heedlessly trade with America’s enemies while benefiting from protection under U.S. law and access to U.S. markets.
It needn’t be this way. The U.S. government should immediately take steps to terminate all contracts with firms like Honeywell that do business in Iran. Such action would provide a legal imperative for corporations like Honeywell that are swayed by neither common sense nor conscience to cease business in Iran.
Americans have awakened to the threat posed by a nuclear Iran. Accordingly, American institutions, including governments, corporations, and universities, have an obligation to ensure that they are reflecting the will of the American people and not working against the U.S. strategic interest by propping up the Iranian regime and facilitating its pursuit of nuclear weapons.