Bush Set To Block Assets of Iranian Quds Force

By ELI LAKE
Staff Reporter of the Sun

WASHINGTON — President Bush is set to instruct the Treasury Department to block assets associated with Iran's revolutionary guard corps in a new executive order declaring financial war on foreign saboteurs of the Iraqi government.

The paperwork to designate Iran's revolutionary guard corps, or IRGC, and Quds Force is now on the president's desk awaiting his signature, according to three administration officials who requested anonymity. The designation of the IRGC and Quds Force would mark the first time the finance related executive order process, reserved usually for foreign terrorist organizations, would be used against a branch of a foreign military.

When queried by The New York Sun yesterday State and Treasury departmental spokesmen declined to comment. A spokeswoman for the National Security Council, Kate Starr, when asked about the pending designation said it would be "inappropriate for me to signal what kind of steps we might take in the future."

Before that, however, Ms. Starr said, " Iran is a state sponsor of terrorism. It uses fronts and government entities, sending arms, expertise and money to groups like Hezbollah, Palestinian terrorist groups, and Shia militias in Iraq. How we address Iran's support for terrorism is part of an ongoing strategy and entails a range of activities and measures, consistent with our national laws and UNSC resolution requirements."

The designation under a new executive order created to list organizations and people sabotaging Iraq's government has been cleared by the National Security Council. Initially, the proposal was to designate Iran under executive order 13224 that was created after September 11, 2001 to freeze and block the financial assets of Al Qaeda. The new order would instruct the Treasury Department to block all assets affiliated with the Iranian Revolutionary Guard, the elite paramilitary and intelligence arm of the Islamic Republic of Iran, whose Quds Force American military generals in Iraq have charged with masterminding the kidnap and murder of five American soldiers in January at Karbala.

The timing of any announcement by Mr. Bush is linked in part to opposition to such a terrorism designation by the four other veto wielding permanent member states of the United Nations Security Council: China, France, Russia, and the United Kingdom. American diplomats in Turtle Bay are now working over a draft third round of U.N. sanctions against Iran for its insistence on spinning nuclear centrifuges in Iran.

A former senior adviser at the office of terrorism and financial intelligence for the Treasury, Michael Jacobson, yesterday said, "A designation of the IRGC would be an important step forward because the IRGC plays a significant role in the Iranian economy, handling some of the country's largest construction projects."

Mr. Jacobson, who left Treasury in February to join the Washington Institute for Near East Policy, said that the Revolutionary Guard earned revenues of about $1 billion a year from business interests, a figure he expected to rise.

"A designation could also have symbolic repercussions. There are people in Iran who don't really like IRGC because they are given an unfair competitive advantage, there are many no bid contracts for big construction, there is some resentment about the IRGC among the Iranian business class," he said.

The idea of listing the Revolutionary Guard under the new executive order drew controversy in the lower levels of the interagency process. State Department lawyers in particular argued that the designation could prompt foreign countries to declare segments of the American armed forces as terrorists as well. The move will also undoubtedly raise already high tensions between America and Iran.