EDITORIAL: Iran's upper hand

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When she visited Israel in March to commemorate its 60th anniversary, German Chancellor Angela Merkel declared that Germany's history has given it "a special responsibility toward Israel." Touring Yad Vashem with some of her cabinet ministers, Mrs. Merkel declared: "Out of awareness of its historical responsibility, the Republic of Germany will never shirk its historical responsibility for preserving the memory of the Holocaust in the future." She has also likened the current Iranian regime to Nazi Germany. But in the absence of laws barring German companies from trading with or investing in Israel's enemy Iran, Mrs. Merkel is relegated to begging German companies to show "sensitivity" on the matter.

More frequently her government capitulates to pressure from German exporters to continue business as usual with Tehran. In July, Germany's federal Office of Economics and Export Control announced it would allow the company Steiner Prematechnik Gastec to sell high-technology equipment that would aid Iran's natural-gas industry -- a source of revenue for the country's terrorist and military activities. German government statistics released this week show trade between the two nations has increased by almost 8 percent this year, a point trumpeted in the Iranian state-controlled press as evidence that commerce has prevailed over "Zionist" opposition.

Tehran has reason to believe it may prevail in its struggle against the United States and its democratic allies. In Poland and the Czech Republic, U.S. allies have taken considerable risks to base elements of a missile defense system against an Iranian attack. Now, having watched Russia invade and occupy Georgian territory, they are being forced to assess whether being an ally of the United States is worth incurring Moscow's wrath and whether NATO and Washington will come to their defense.

In Venezuela, another Iranian ally, President Hugo Chavez, has signed an agreement with Moscow for "civilian" nuclear development -- the same kind of program that Iran has been working to transform into something that is hardly peaceful.

While world attention is focused on matters like the Mumbai terrorist attacks, Iran has quietly continued to make progress toward developing nuclear weapons. Last month, the Iranian government announced it was operating 5,000 uranium enrichment centrifuges at its Natanz nuclear power plant. International Atomic Energy Agency (IAEA) inspectors released a report suggesting that Iran may already have enough enriched uranium for an atomic bomb.

The IAEA has also been investigating Tehran's work on a new ballistic missile warhead, called Project 111. The warhead would be mounted on the Shahab-3, an Iranian medium-range missile that can reach the entire Middle East and parts of Europe. Technical documents in the IAEA's possession indicate that Iran may have been working to redesign the payload chamber of the Shahab-3's re-entry vehicle to accommodate a nuclear warhead. Heritage Foundation scholar Peter Brookes adds that Iran is also suspected of involvement in the development of an intercontinental ballistic missile - possibly under the cover of a civilian space program.

None of this has discouraged German firms determined to increase trade with Iran. On Nov. 27, the German-Iranian Chamber of Commerce (GICC) held a conference in Hamburg, titled "Iran Sanctions: Practical Consequence for German Firms." The goal of the meeting was to encourage more German businesses to trade with Iran, and it included workshops on how to obtain German government credit guarantees for trade with the Islamic republic. Thomas Scheuermann, vice president of the GICC, delivered a speech on the "Civil legal aspects for German firms in Iranian trade." When asked by a Jerusalem Post reporter about his presentation, Mr. Scheuermann declined comment, adding: "You work for Israel."

According to Matthias Kuntzel, a Hamburg-based political scientist and freelance journalist who follows Iranian-German relations, the GICC works closely with Iran's Saderat Bank. In September 2006, the Treasury Department announced that this bank would no longer have access to the U.S. financial system because the Iranian government had been using it to facilitate the transfer of hundreds of millions of dollars per year to terrorist groups including Hezbollah, Hamas and Palestinian Islamic Jihad.

Another panel, titled "Financing Iranian business deals," included a presentation by Sabine Hummerich, who was listed as the representative of Bank Melli -- Iran's largest bank, and one which is fully owned by the Iranian government. The bank boasts that its German subsidiary in Hamburg increased its net income by 33 percent during 2007-08. On Sept. 25, 2007, the State Department announced regulations barring American companies and individuals from doing business with Bank Melli because of its role in providing banking services "to entities involved in Iran's nuclear and ballistic missile programs." It also said, "Through its role as a financial conduit, Bank Melli has facilitated numerous purchases of sensitive materials for Iran's nuclear and ballistic missile programs."

Between 2002 and 2006, Bank Melli was used to send at least $100 million to the Qods Force, which conducts special operations for Iran's Islamic Revolutionary Guard Corps (IRGC). As the State Department noted in announcing sanctions against Bank Melli: "The IRGC is one of the primary regime organizations tied to developing and testing the Shahab-3. ... The IRGC has been outspoken about its willingness to proliferate missiles capable of carrying WMD." Since that time, U.S. military forces in Iraq have captured numerous members of the IRGC and the Qods Force -- suspects who crossed the border to kill and maim Iraqis and American soldiers.

Meanwhile, a palpable WMD fatigue has overcome Washington. The lack of compelling weapons finds in Iraq seems to have blinded the policy community to the growing evidence of an ongoing weapons program in Iran. Some policy makers secretly hope that Israel will find a way to solve the problem militarily, or at least kick it further down the road. Others envision a "grand bargain" that will convince Tehran to trade away the nuclear option in return for vaguely defined benefits of American goodwill. Still others suggest that the entire counter-proliferation enterprise is dead, and that the U.S. should erect a diplomatic structure to contain an inevitably nuclear Iran. There are several drawbacks to this approach. Primarily, there is the notion that a nuclear-armed Iran would not alter the strategic equation because Tehran would be deterred the same way Moscow was. Iran is not seeking a nuclear capability in order to be deterred; it is seeking it to deter us. Once assured that the United States will no longer be able to threaten the survival of the Islamic revolution, Iran will feel more confident in seeking other means to expand its sphere of influence - just as the Soviet Union did.

Yet there is no noticeable urgency on the part of the current U.S. administration to confront this issue with the seriousness it deserves. Iran is not behaving like a power that is cowed by the prospect of international economic sanctions or military intervention; it doesn't believe the former would be effective, or that the latter is possible. Iran is certain it can move forward on both the nuclear and missile fronts with impunity.

A nuclear-capable Iran armed with ICBMs could be only months away. Meanwhile Washington drifts, awaiting more compelling news to shake it from its lethargy.