Taking Aim At Tehran's Elite

They may be the hardest of the hard core, the fiercely ideological "true believers" in Iran's Islamic revolution, as one U.S. official puts it. As the Bush administration aims to step up pressure on Iran, it is focusing on the Iranian Revolutionary Guard Corps, the armed guardians of Iran's theocracy.

U.S. officials offer a bill of particulars against the 125,000-strong IRGC: support for insurgents in Iraq, backing for Hezbollah in Lebanon and Hamas in the Gaza Strip, and the operation of an alleged clandestine nuclear weapons program that President Bush insists must be shut down. "The Revolutionary Guard is often at the forefront of these bad activities," says a senior administration official. "They're lighting the tinder."

But taking action is proving tricky. Officials allude to a painstaking interagency effort to uncover the Guard's concealed web of economic interests and to detail its suspected role in nuclear matters. "It's hard to tease out," one official said of the Guard's opaque business connections. Washington is pressing allies and others to scrutinize their commercial contacts with Iran. They are being told, says the official, that "there's a good chance the hidden hand behind it is the Revolutionary Guard."

Two months ago, news leaks indicated that the administration was preparing to escalate matters with a presidential decision to designate the whole Guard, or its elite Quds Force foreign operations wing, as a terrorist group subject to additional sanctions. Should that happen, it would apparently be the first time an official defense agency of some country has been labeled a terrorist group, let alone one allegedly facilitating deadly attacks on Americans.

But while the Senate went on record last month with a resolution favoring that step, administration officials now are tightlipped about how, and even whether, they will proceed. One issue has been the reaction of foreign allies, anxious that President Bush may be taking a step toward a military showdown. U.S officials deny that interpretation.

European diplomats, U.S. News has learned, are warning the Bush administration that IRGC designation would devastate whatever prospects remain for Iran-related diplomacy at the U.N. Security Council, where the administration is trying to get Russia and China to back further sanctions if Tehran doesn't halt its nuclear program. Given the IRGC's pervasive role in Iran's politics and economy, the designation is also seen by some critics as overly broad, steering the United States and its allies away from a policy of targeted sanctions and toward seeking regime change. Says Kenneth Katzman, a veteran Iran expert at the Congressional Research Service, "The Europeans pushed back."

Follow the money. The terrorist designation would hit at the Guard's considerable commercial activities. It is a commercial powerhouse, involved with more than 100 companies and managing billions of dollars in business, much of it courtesy of no-bid contracts. Its construction and civil engineering arm has virtually squeezed out competitors. IRGC interests range from assembling Mazda cars, expanding the Tehran subway, and running trading companies to telecommunications, agriculture, and oil and gas projects. It has contracted to develop parts of Iran's South Pars gas field. It briefly shut down the new Tehran international airport in an apparent strong-arm tactic to shelter its own air shipments and wrest control of the facility from a foreign consortium.

Says Treasury Secretary Henry Paulson, "It is increasingly likely that if you are doing business with Iran, you are somehow doing business with the IRGC." The administration is hoping that casting the spotlight on the Guard will prove bad for business.

By Thomas Omestad