Avi Jorisch has served as the policy adviser at the Treasury Department's Office of Terrorism and Financial Intelligence, a liaison to the  Department of Homeland Security, and Arab Media and Terrorism Consultant for the Department of Defense.  He is the founder of Red Cell Intelligence Group, a consulting firm specializing in national security issues relating to terrorism, illicit finance and radical Islam.  He is an adjunct scholar at the Washington Institute for Near East policy.  In addition to holding a master's degree in Islamic history, Mr. Jorisch has studied Arabic and Islamic philosophy at the American University, the Al-Azhar University.

 MR. JORISCH:  Thank you.  It's always nice to start a speech with the pronunciation of my last name done correctly.  It's always hard to follow everyone that has hair when I don't.  (Laughter.) But pleased to have the opportunity to be here today to promote the liberal values we cherish in this case, freedom of speech, freedom of religion and freedom of assembly.                                                                

Many of you are here today because of your concern for universal rights.  We all certainly want a better and brighter, since 1979.

Thankfully, the world's attention has finally become to turn towards the Mullahs pursuit of nuclear weapons and their sponsorship of terrorist organizations.  We must do everything in our power to stop their March towards nuclearization.  If Iran gets the bomb, it will be game-changing event that will have far reaching consequences.

What can we, the western world, do?  There are only three ways to influence such an outcome:  Diplomatically, economically, and militarily.

Today I'm going to spend the majority of my remarks how to engage in effective economic warfare that, if implanted expeditiously, will stop the Iranian regime in their tracks.

I want to empower each and every one of you so when you speak to your members of Congress, your policymakers, you know exactly the levers that will force the Iranian regime to fall.

The government of Iran is facilitating its proliferation and terrorism activities through the world's financial system, using its state-owned bank and an array of front companies and other deceptive techniques specifically designed to evade the controls of responsible financial institutions.

There's been a tremendous amount of talk in Washington policy circles and the media regarding sanctions.  But can they be effective?  And if so, how?

I'd like to outline a roadmap that if implemented could go a long way to hurting the regime where it hurts the most, their pocketbook.

First let's start with oil and liquefied natural gas.  The United States Congress, the United States Government and Congress in particular has spent tremendous amount of resources and time to explore how to cut off refined petroleum and gas to Iran.  Although Iran is a major producer of crude oil, it imports 40 percent of gasoline it needs to power its economy and military because it lacks the refining capacity to meet its internal consumption.                                                                

A number of companies, however, have been identified as the primary culprits that supply gasoline to the Islamic Republic of Iran.  Just as importantly, there has been serious thought given to the potential leverage we might use to persuade these companies to stop the sale of gasoline.

But little attention has been paid on how to stop Iran's biggest source of revenue -- crude oil and liquified natural gas.  Iran has the third largest oil known natural gas reserves.

Over two-thirds of Iranian natural gas reserves have not even been developed.  Natural gas and oil consumption is expect to grow around 7 percent annually for the next decade in Iran.  As with the oil industry, natural gas prices in Iran are heavily subsidized by the government.

There is one kink, just as in the case of oil, Iran is the net importer of gas.  It is time to target not only refined petroleum and gas, but also oil and gas itself.  We must identify the major countries and companies who buy oil and gas from Iran and sanction those who carryout these types of sales.  The Treasury Department has that list.  It's time to implement that list.

Both the Senate and the House of Representatives have passed measures that are defined to cut off Iran's supply of refined gasoline.  We must now include language that that would include Iran's other Achilles Heel, crude oil and Liquefied Natural Gas.

The second point is banking.  There are

currently 30 Iranian banks operating around the globe. Twenty have been designated by the U.S. Government. These banks are able to procure much needed hard currency in order to fund its illicit behavior. There's good news and bad news.

Good news:  The U.S. Government has done an outstanding job of designating bad banks and letting the international community know what we're dealing with.  The U.S. banking sector has done an excellent job in making sure it doesn't deal directly with designated financial institutions in Iran.

The Treasury Department has quietly reached out to major financial institutions around the globe and informed them that they could lose access to U.S. market if they offered designated Iranian banks any type of US dollars.  Major global banking organizations, like SWIFT, are finally turning their backs on the Mullahs.  That's the good news.

The bad news:  There's still international financial institutions offering designated Iranian entities with financial services.  The Treasury Department has not sanctioned those banks yet.

Also, there are also major financial institutions around the world that are offering banks designated by the US the UN currencies other than dollar -- Euros, British Pounds, Swiss Franks, to name just a few.

Many of these financial institutions have separations in the United States.  Other banks that don't have US operations here themselves bank with US financial institutions to gain access the US market.                                                                 

We have major leverage over these financial institutions but we're not using it.

Can you imagine if we gave those banks a choice to choose between our market and the Iranian market?  None of them would choose the Iranian market.

I urge you to talk to your members of Congress as this is the most powerful ways of making Iran feel the financial pain.  I can't stress this point strongly enough.

Clearing houses.  Recently, it has become public that Iran has been abusing international clearing houses to the tune of billions of dollars a year.

Iran seems to be cleverly exploiting clearing houses to circumvent U.S. sanctions.  A New York district judge ordered Citibank to freeze almost $2 billion of debt-securities largely belonging to the Islamic Republic of Iran.

According to U.S. judicial documents filed in both New York and California, these funds are held at Citibank in the name of Luxembourg-based clearing                                                                

house and bank, Clearstream. Citibank, along with any other U.S. financial institutions, is supposed to freeze all Iranian dollar transactions, with limited exceptions for certain foodstuffs, textiles and medicines.

Under the International Emergency Economic Powers Act, institutions in violation of U.S. law are subject to a fine of either $250,000 or the amount that

is twice the amount of the transaction, which could make Citibank potentially liable for a penalty up to $4 billion if the U.S..

Why Citibank would open itself to that type of risk is really beyond me?

If the U.S. Government is serious about enforcing existing sanctions against Iran, the Clearstream case deserves more scrutiny.  How much money is Iran actually moving in the U.S. through Clearstream and other financial institutions?

The U.S. Government, and particularly the Treasury Department, should carry out an extensive assessment on how to prevent Iran from abusing international clearing houses, and act accordingly. Otherwise, Iran will continued to have access to hard currency, including the U.S. dollar, which undoubtedly aids and abets their illicit behavior.

Many of you come from Iran so you know better than most, that Imam Khomeini established the Islamic Revolutionary Guard Corp to protect the Islamic order of the new Iranian government in 1979.

Since its founding it has now evolved into a political military and economic powerhouse in Iran. It reportedly has close ties to the Supreme Leader and President Ahmadi-Nejad himself, who himself is a veteran of the IRGC.  The IRGC is believed to number about 125,000 members.  It operates most of Iran's surface-to-surface missiles; it is believed to have custody over most or all other chemical, biological and radiological weapons; and were Iran to obtain nuclear armed weapons, experts believe IRGC would operate them.

The IRGC is active both within Iran and its borders.  Its activities range from: establishing educational systems for indoctrination civilian infrastructure, supporting Iran and its radical ideology, funding and supporting supports of the regime, setting up and operating armed terrorist/guerilla cells around the world, and subverting secular, pro-Western Arab-Muslin regimes. Beyond the borders of Iran, the IRGC has been active in places like Iraq, Lebanon and the Palestinianterritories.  This is the organization that has worked with the likes of Hizbollah, Hamas and perhaps even al-Qaeda.

The IRGC has been designated by the USG for its involvement in proliferating weapons of mass destruction.  It plays a major role in Iran's oil industry, in construction and obviously Iran's military complex.  It is also one of the corrupt components of Iranian regime.

Options that we have are follows:  First, the government should release a mapping of all high ranking officials of the IRGC, what they do in the organization and any contact information we have on them.  This will hopefully curve their movement outside of Iran or put them on notice, we know who you are and we can find you.  (Applause.)

In addition it has been reported that the children of many high ranking IRGC officials are studying in the west.  Including in the United States, including at George Washington University just 15 blocks from here.  Should we allow that to be taking?  I say no.  (Applause.)  Can you imagine us allowing the children of high ranking Nazis to be studying in the United States?  No.  It's amazing what you can find on Google, my friend.

Bonyads.  Bonyads are Iranian charitable trusts that dominate Iran's non-petroleum Bonyads economy.  Bonyads control estimated 20 to 40 percent of Iran's GDP.  Bonyads are tax-exempt, receive major subsidies from the government but do not have much in the way of government control.  They answer only to the Supreme Leader of Iran.                                                                

As charity organizations they're supposed to provide Social Services to the poor and needy. Iran has over 12 million people living under the poverty line, 6 million are not receiving government or Bonyads assistance.

With the declared purpose of redistributing income to the poor and families of those killed in service of the country, there are a hundred known Bonyads.  They're involved in every major industry in Iran.  Examples include the production of soybean and cotton, they run hotels and own soft drink companies, shipping lines and the manufacturing of cars.

To name one example, one of the popular, the Foundation for the Oppressed and Disabled, supposedly controls 20 percent of the country's production of textiles, 40 percent of soft drinks and two-thirds of all glass products and dominant share in tiles, chemicals, tires and foodstuffs.  It therefore should come as no surprise that Iranian private sector finds it difficult to compete against the Bonyads.

They have political connections, clout and their major  government subsidies in hand.

Given this major vulnerability, it might be high time for the U.S. government to publicly name and shame all the major Bonyads.  It might consider designating them, thus making it illegal to make a charitable donation to any one of these organizations.  (Applause.)

This is the type of organization that should be on the FTO list.  With those in Europe and Asia that presently give money to these types of organizations.

Let me close with this final thought.  We have all the tools necessary to persuade and punish companies doing business with Iran today.  If we truly going to stop Iran from obtaining nuclear weapons it might be prudent to use some if not all the bows in our quiver.  Together, we can make a difference. Thank you for being here today.  (Applause.)

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