The US-appointed Iraqi interim
government said late last month in a little-noticed
statement that it would buy electricity from
Syria and Iran, a deal that would probably enrich
with US funds two countries that top the White
House list of states that support terrorism.
The move reveals the limits of President Bush's
war on terrorism, of which the invasion of Iraq
was a key part, and of trade sanctions generally.
With many details of the Iraqi reconstruction
effort unclear, it's not certain whether the United
States or its contractors in Iraq would be violating
an embargo -- in place since the 1979 seizure
of America's embassy in Tehran -- against doing
business with Iran.
"There is a formal process" for doing business
with Iran, said Edward Chow, an oil consultant
who has had to navigate the complex US rules
prohibiting companies from doing business with
Iran. "If there's a dollar transaction that
exceeds a certain threshold you have to get
permission. It is not easy to evade those sanctions."
Spokesmen for the Bechtel Group, the San Francisco
engineering giant that is restoring Iraq's energy
grid as part of its $1 billion contract to rebuild
the country, said it knows nothing of the proposed
energy sale. An official at the Department of
Treasury, which monitors countries under US
embargo, said he was unaware of Iraqi efforts
to buy electricity from its neighbors, but doubted
the United States would veto such a transaction.
"It could be we regard Iraq as a sovereign state
that can purchase electricity from any country
it likes," the treasury official said.
A spokesman for the Pentagon, which has authority
over the US occupation of Iraq, referred questions
to a counterpart in Baghdad, who could not be
The United States imposed sanctions on Iran
in 1979, and tightened them as part of the Iran-Libya
Sanctions Act in 2001. A bill that would apply
a similar embargo on Syria is working its way
through Congress, largely because Syria continues
to support the radical Lebanese group Hezbollah.
Removing Saddam Hussein, said Bush officials,
would intimidate rogue regimes like Iran and
Syria into obedience. Some administration hard-liners
had even suggested Iran or Syria, or perhaps
both, were next on the Pentagon's target list.
But with postwar Iraq in disarray, starting
with an acute energy shortage that has destabilized
the country, the White House has had to lower
its sights. Rather than subduing Syria and Iran,
the United States appears to be relying on them
to help alleviate Iraq's crippling power failures.
"There is the hubris of the administration
and there is the reality on the ground," said
Peter Galbraith, a former US ambassador and
senior advisor to the Senate Foreign Relations
Committee. "And the reality is Iraq needs to
have good relations with its neighbors."
Muwaffak Al Rubai, a member of Iraq's interim
governing council, said on Aug. 27 that Iraq
was negotiating with Syria, Iran, and Turkey
for electricity to augment energy supplies rationed
by the US occupation. Rubai said negotiations
between Iraq and Turkey were well underway and
were moving ahead with Syria. On Aug. 31, Tehran's
state media announced Iran would supply electricity
to the southern Iraqi cities of Mehran and Dehloran.
The moves come as US occupation officials
are struggling to restore Iraq's energy output
from 3,200 megawatts to its prewar level of
4,000 megawatts. The country has a maximum production
capacity of 6,000 megawatts.
Iraq is technically bankrupt and is surviving
on a drip feed of US funds and limited oil revenue.
Analysts said the purchase of Iranian electricity,
though an important step toward rapprochement
between two countries that fought a devastating
war in the 1980s, reflects inconsistent US policy.
For instance, just last month Japan said it
would buy Iranian oil after resisting weeks
of pressure from the United States to respect
its embargo on Tehran.
"What the heck are we doing jawboning the
Japanese from signing an Iranian oil deal when
Iraq is buying Iranian electricity?" said Chow.
(c) 2003, The Boston Globe. Distributed by
Knight Ridder/Tribune Business News.