President Obama has previously argued that Tehran could be expected to dedicate all or nearly all of the new revenue to reinvesting in an economy that had been crippled by economic sanctions. But critics have countered that if Iran did not restrain its terrorist financing while sanctions were in full effect, it is unlikely to do so now that nuclear-related sanctions will be removed.
Additional sanctions specifically related to terrorism and regional aggression will technically remain in place, but last week several reports and editorials highlighted the fact that it is difficult to decouple the different types of sanctions in every case. As Iran News Update previously reported, recent examinations of the text of the agreement reveal that it removes sanctions against some individuals and entities associated with Iran’s past terrorist activities. Prominent among these are Ahmad Vahidi, the former commander of the Iranian Revolutionary Guard Corps’ Quds Force and a suspect in the 1994 bombing of the Argentine-Israeli Mutual Association building in Buenos Aires, which killed 85 people.
The Quds Force and the IRGC as a whole have been budget priorities throughout the life of the Iranian regime, even during severe economic sanctions. The budget for the current Iranian year saw an increase of about one-third for the paramilitary organization at a time when poverty levels had risen precipitously and extremely high rates of inflation were only beginning to recover on the backs of incremental sanctions relief.
The Daily Caller reported on Wednesday that Iran spends about 3.4 percent of its budget on defense, at a minimum. But the same article notes that Iran has a reputation for inaccurate reporting of its own finances, so current estimates of 12 to 14 billion dollars in defense spending may be low. Whatever the actual figure, about two thirds of it appears to be dedicated to the IRGC, which is responsible both for domestic paramilitary operations and foreign activities including Iranian intervention in the Syria and Yemeni civil wars.
The Daily Caller adds that according to the American Action Forum think tank, and based on the best estimates of Iranian budgetary spending, the initial cash windfall from the Iran nuclear deal can be expected to lead to at least 3.1 billion additional dollars being earmarked for the IRGC, and potentially channeled from there into the hands of terrorist groups like Hezbollah and Hamas. This would constitute a roughly 50 percent increase in the total IRGC budget.
Tehran’s recent financing of Hamas illustrates that despite its strict Shiite ideology, the IRGC is not entirely averse to working with Sunni extremist groups as well, for the sake of mutual conflict against Israel or the West. This fact was further illustrated on Wednesday when Reuters reported that Iran had held talks with Ahrar al-Sham, a Sunni Islamist group based in Syria.
One ostensible motivation for the Obama administration’s negotiations with Iran involved the hope that it would become a closer partner in the two country’s mutual fight against the Islamic State of Iraq and Syria. But opponents of the Iranian regime, among them the National Council of Resistance of Iran, have countered that an Iranian role in that conflict can only be expected to replace one form of extremism with another.
In addition to the threat of Iranian Shiite hegemony in the region, the meetings with Ahrar al-Sham raise the possibility of ISIS simply being replaced with Sunni extremist groups that are more palatable to Tehran’s regional strategy.
Reuters claims that the recent signs of Shiite-Sunni cooperation by the Iranian regime are unusual. But Tehran has an established history of partnering with Sunni militants when it served the Islamic Republic’s regional strategy. This includes lengthy incidences of allowing Al Qaeda affiliates to operate from a secure base of operations inside of Iran.
In other situations, including both Yemen and Iraq, the IRGC’s exclusive support for Shiite militias has been credited with producing counter-trends of recruitment by Sunni extremist groups. Opponents of Iran’s regional activities are thus concerned that any additional financing for the IRGC could lead to an overall upsurge in sectarian conflict and instability throughout the region.