O's Twin Failures Iraq/Iran Bite

Obama's Twin Iran-Iraq Failures Metastasize

Posted 08/20/2012 07:02 PM ET

Mideast: Sanctions against Iran are even more ineffective than believed. Foolishly relying on them to stop Tehran's nuclear program, the president gave Baghdad license to help Iran evade the sanctions by leaving Iraq.
'To Obama's internationalist sensibility," former U.S. Ambassador to the United Nations John Bolton once wrote in Commentary magazine, "laws 'made in the U.S.A.' by freely elected representatives of our own citizenry are too 'exceptional' and too 'parochial' to hold weight in this interconnected world."
Paradoxically, it turns out that President Obama fails to understand the interconnected nature even of neighboring countries in the Middle East.
He never realized, for instance, that extracting the U.S. presence and influence in one volatile Muslim country — Iraq — would go gravely against the objectives of our policies next door, in the country with the most threatening regime in the world today — Iran.
The New York Times over the weekend reported that "for months, Iraq has been helping Iran skirt economic sanctions imposed on Tehran because of its nuclear program."
It turns out that Iraqi bankers have been neutralizing the already limited effects of U.S. and United Nations sanctions against the Islamofascist regime in Tehran. Iraq's government is apparently pretending not to notice "large financial flows, smuggling and other trade with Iran," with high-level Iraqis even "directly profiting from the activities."
Meanwhile, trade between Iran and Iraq is uncontrollable, reaching as much as $11 billion a year.
Obama last month announced that one Baghdad bank's connections with U.S. banks would be cut off, but U.S. and Iraqi government and banking officials told the Times that as many as four Iraqi banks might be under Iranian control.

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And in obvious disregard for Obama, the Iraqi government continues allowing the institution the president targeted, Elaf Islamic Bank, to purchase U.S. dollars on a daily basis, thus allowing the Iranians to move large amounts of cash into the international banking system.
What's more, much of the money misused by Iran is actually under the U.S. government's nose, with approximately $60 billion of Iraqi central bank reserves at the Federal Reserve Bank of New York.
One Iraqi parliamentarian feared Iran's exploitation of Iraqi banks threatened Iraq's economy, because it was depleting Baghdad's foreign reserves, much of which come from huge oil revenues made possible by its U.S. liberation.
The Obama administration has apparently exacerbated this crisis. The U.S. privately told the Iraqi government that it "would not be found to be in violation of the new Iran sanctions," a former U.S. official told the Times.
As a result, "the Iraqi government has done little to stop a highly organized effort" — including the smuggling of Iraqi fuel oil into Iran "at extremely low prices with the help of government subsidies."
On top of that, "at least some Iranian oil is finding its way to Iraqi ports for export."
Why shouldn't the government of Iraqi Prime Minister Nouri al-Maliki help its neighbor Iran at the expense of the U.S.? Uncle Sam hightailed it on the last train. America has left the Iraqi people to the wolves, so they might as well save themselves by making deals.
Consider all the implications here. Iran is insulating itself from the sanctions meant to stop its nuclear weapons program. Iraq's economy might be destabilized because of illicit exploitation of its banking system, draining it of cash.
Ultimately, an Iran that America allowed to become armed with nuclear weapons will dominate an Iraq we allowed to become economically and politically weakened.
Funny how the modern world's interconnections don't operate the way they're supposed to when a non-exceptionalist America shirks on its responsibilities.