Yeah, so 24 hours before things heated up between Israel and the Quds (operating out of Syria) last week, I weighed in with the following:
Obviously, Israel and Saudi Arabia support Trump’s decision (Netanyahu called it “brave” and Saudi state television said the monarchy “welcomes and supports” the move). That’s certainly fine as everyone is just looking out for their own interests, which is natural. But the bottom line is that this decision was partly informed by a desire to curtail Tehran’s growing regional influence. The conflict in Syria has almost unquestionably strengthened the hand of Hezbollah (which just scored what’s being billed as a sweeping victory in Lebanon’s parliamentary elections) while the lengthy war of attrition between the Iran-backed Houthis in Yemen and the Saudis suggests it’s going to be exceptionally difficult for Riyadh to rid themselves of the IRGC’s influence on the Kingdom’s southern border. Additionally, Iran’s influence in post-war Iraq borders on hegemony.
Taken together and considered with Tehran’s highly contentious ballistic missile program and the fact that Quds commander Qassem Soleimani continues to hold enormous sway over regional affairs (if you’re not familiar, he’s something of a ghost story and his fingerprints have shown up on everything from the infamous kidnapped Qatari falconry party that purportedly helped spark the Qatar embargo last year, to the rather embarrassing seizure of Kirkuk from the Kurds last October to Tuesday’s bomb shelter news), what you end up wondering is whether Israel and the Sunni powers, fed up with Iran’s ambitions, helped sway Trump’s decision. Again, that’s not a comment on the relative merits of the decision, nor is it an attempt to suggest that curbing Tehran’s regional influence isn’t desirable, it’s just to state the obvious which is that Iran is going to see this for what it is and respond accordingly where “accordingly” doesn’t entail anything good.
That reference to Soleimani was obviously important. Those passages were from a lengthly piece on Trump’s decision to exit the Iran deal, but I touched on the same issue briefly prior to writing that. This is from our daily wrap published last Tuesday after Trump made it official:
The decision to exit the Iran deal has the potential to be the most momentous blunder he’s made yet. That’s not to say it will necessarily turn into a disaster, it’s just to say that the potential is there. One of the many ironic things about his rationale is that for all his implicit and explicit criticism of the IRGC/Quds, Hezbollah and the Houthis, Tuesday’s decision is only going to make things worse in terms of inflaming sectarian tensions and exacerbating regional conflicts. In fact, there’s a solid argument to be made that this decision endangers U.S. forces in the region – we know from the Iraq experience that when you piss on Soleimani’s shoes, he paints a target on the back of U.S. operators in the region, effectively meaning they’re in danger not only from Sunni insurgents but also from Iran-backed militia. That’s another important story arc here.
And then sure enough, he hit Israel hours later. Here’s what we said the following day:
Israel and the Quds are shooting at each other, which isn’t at all surprising and the risk of an escalation there seems to have risen materially over the past 48 hours in the wake of Trump’s exit from the Iran deal.
“Iran does not in any way welcome new tensions in the region,” Rouhani told Merkel over the phone today, adding that Tehran has “an advisory” role in Syria. Meet your “advisor” (from Reuters):
Israel accused the general in charge of the Iranian Revolutionary Guards Corps’ external operations branch of orchestrating a rocket attack on Thursday against Israeli army bases on the Golan Heights from within Syria.
“It was ordered and commanded by Qassem Soleimani and it has not achieved its purpose,” Israeli military spokesman Lieutenant-General Jonathan Conricus told reporters.
Well fast forward a week and the Treasury has sanctioned Valiollah Seif, Iran’s central bank governor, for helping Soleimani and the Quds funnel money to Hezbollah.
Here’s the official word:
Today, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) imposed sanctions on the Governor and a senior official of the Central Bank of Iran, an Iraq-based bank and its chairman, and a key Hizballah official, all of whom have moved millions of dollars on behalf of the Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF) to Hizballah. They were designated as Specially Designated Global Terrorists (SDGTs) pursuant to Executive Order (E.O.) 13224, which targets terrorists and those providing support to terrorists or acts of terrorism.
“Iran’s Central Bank Governor covertly funneled millions of dollars on behalf of the IRGC-QF through Iraq-based al-Bilad Islamic Bank to enrich and support the violent and radical agenda of Hizballah. It is appalling, but not surprising, that Iran’s senior-most banking official would conspire with the IRGC-QF to facilitate funding of terror groups like Hizballah, and it undermines any credibility he could claim in protecting the integrity of the institution as a central bank governor,” said Treasury Secretary Steven T. Mnuchin. “The United States will not permit Iran’s increasingly brazen abuse of the international financial system. The global community must remain vigilant against Iran’s deceptive efforts to provide financial support to its terrorist proxies.”
And here’s a fun visualization Mnuchin released last week:
“It is appalling, but not surprising, that Iran’s senior-most banking official would conspire with the IRGC-QF to facilitate funding of terror groups like Hizballah, and it undermines any credibility he could claim in protecting the integrity of the institution as a central bank governor,” a statement from Mnuchin reads.
“The United States will not permit Iran’s increasingly brazen abuse of the international financial system,” Steve continued.
To be clear, this isn’t going to make any difference. I mean, sure, they can tighten the screws and exacerbate the currency crisis in Iran, but the idea that they’re going to cut off the Quds from dollar funding is laughable.
Note above how I mentioned that Qatari falconry party whose ransom was allegedly the last straw that triggered the embargo last summer. Well read this from the Washington Post’s coverage:
But the conversations and text messages obtained by The Post paint a more complex portrait. They show senior Qatari diplomats appearing to sign off on a series of side payments ranging from $5 million to $50 million to Iranian and Iraqi officials and paramilitary leaders, with $25 million earmarked for a Kata’ib Hezbollah boss and $50 million set aside for “Qassem,” an apparent reference to Qassem Soleimani, the leader of Iran’s Islamic Revolutionary Guard Corps and a key participant in the hostage deal.
Despite years of efforts to keep this fucker from wielding his considerable influence in the region, nothing and no one has been able to stop him. It was Soleimani who convinced Putin to intervene in Syria, for instance.
He reports directly to Khamenei, so you can’t tell his belligerent ass anything.
Just to underscore how he basically just tours the Shiite crescent on a daily basis and moves the chess pieces around, note that today, he’s in Baghdad trying to sort this al-Sadr shit out. Here’s Kurdistan24:
Controversial Iranian general Qassem Soleimani is in talks with Shia leaders in Baghdad after a partial announcement of election results, a source familiar with the talks told Kurdistan 24 on Tuesday.
Soleimani, in charge of the external operations branch of the Iranian Revolutionary Guards Corps, worked closely with Iraq’s Hashd al-Shaabi (PMF) militias in the war against the Islamic State (IS) and has become emblematic of Iranian influence in Baghdad.
“[Qassem] Soleimani just arrived in Baghdad,” the source, who spoke on condition of anonymity, told Kurdistan 24. “His visit coincided with the announcement of the election results.”
Iraqi national elections were held on Saturday and 44 percent of eligible voters headed to the polls, according to the Independent High Electoral Commission (IHEC).
According to IHEC announcements, Moqtada al-Sadr is the winner. A Shi’ite cleric with far fewer ties to Tehran than Soleimani’s clear preferred victor, Al-Fatih Coalition leader Hadi al-Amiri, Sadr has often proved politically unpredictable.
You get the idea. The Quds run the show in Iraq, Syria and likely Yemen and while it’s impossible to know, for sure, what impact sanctioning Seif will ultimately have, I think it’s safe to say that if the goal is to curtail the Quds and cut off funding to Hezbollah, Mnuchin is going to have to try a little harder.
As far as the beleaguered rial goes, well, that’s another story altogether…