Why you should care
This think tank is politicians’ brain trust on Iran sanctions.
Few people outside a small circle of Middle East policy experts have ever heard of Mark Dubowitz, a diminutive lawyer turned tech exec turned Iran sanctions guru at the D.C. think tank Foundation for Defense of Democracies (FDD). But this past fall, his name was suddenly on the tips of policymakers’ tongues as the White House, Congress and allies overseas sparred over thawing relations with Iran after more than 30 acrimonious years.
At issue: The United States is grappling with how to extend a tentative olive branch to Tehran without dismantling the financial blockade it’s spent years building and which brought the mullahs to the table in the first place. And Dubowitz thought he had the solution: a highly technical financial maneuver resting on the fact that more than $100 billion of Iran’s cash reserves are tied up in overseas bank accounts it can’t access, a result of U.S. sanctions barring certain banking transactions with Tehran. The U.S. could offer Iran access to some of this money — and could quickly rescind it if Iran failed to live up to its end of the bargain.
Sanctions hardliners in Congress were also mulling Dubowitz’s idea but wanted to attach even stricter limits…
After all, despite the historic phone call between President Obama and the new, more moderate Iranian President Hassan Rouhani in October, Western distrust of the fundamentalist Muslim clerics that rule this country of 80 million still runs deep.
Dubowitz briefed officials at the State and Treasury Departments on his proposal, which wound its way through the administration’s bureaucracy and eventually reached the White House. In October, press reports began surfacing that the president was considering the idea — and linked it explicitly to Dubowitz and his think tank. Clearly someone on Obama’s team calculated that the affiliation would boost its validity.
Meanwhile, sanctions hardliners in Congress were also mulling Dubowitz’s idea but wanted to attach even stricter limits on Iran. The interim deal Iran inked with world powers in late November, which requires Tehran to halt its nuclear enrichment in exchange for $4 billion in frozen assets and other economic incentives, mooted that discussion. The trouble – at least from Dubowitz’s standpoint — is that the White House ended up using only half the idea, allowing access to the cash but without a way to take it away if Iran cheats, while also lifting some other key sanctions. That, alone, was not new, he says, and he and others worry that it gives the United States’ longtime nemesis the financial lifeline it desperately needs — without being able to force its hand on dismantling the nuclear program. But plenty of others worry pressing Iran too hard will lead them to walk away … and put the U.S. on the brink of war.
The think tank has carved a niche for itself in the charged debate on Iran with its intensive research and sheer intellectual firepower.
What’s abundantly clear, however, is the glimpse it provides of the kind of player the mid-40s Dubowitz and his think tank have become in the high-stakes tug-of-war between Obama and Congress on Iran policy — contributing ideas that the administration will sometimes embrace, while providing fuel for the White House’s hard-line critics.
FDD has carved a niche for itself in the charged debate on Iran with its intensive research and sheer intellectual firepower it has brought to the complicated and murky world of Iranian commerce. Their deep dives into energy markets, global finance and Iran’s state-controlled economy have become ammunition for the policymakers using increasingly sophisticated financial sanctions to wage an economic war on Iran.
“It’s not magic,” Dubowitz says of the organization’s growing influence. It’s a version of what all think tanks do: pick a policy area and ”get to know it really well.”
FDD was formed shortly after Sept. 11, 2001, with a focus on national security and the fight against Islamic terrorism. It’s been slapped by progressive groups for its hawkish stances and its ties to Republican officials and donors — founder Clifford May was once communications director for the Republican National Committee. But its Iran researchers have worked closely with officials from both parties, on Capitol Hill and in the Obama administration, particularly when it comes to sanctions.
Former Congressman Howard Berman says the group’s experts had a significant impact on two rounds of sanctions laws he worked on. “Look, they probably had their own philosophical bent,” says the veteran California Democrat, ”but their work was intellectually solid.”
A Treasury Department spokesman confirmed they have used information the FDD has provided on sanctions violators but wouldn’t comment further.
Dubowitz joined the group in 2003 after a career in technology startups — he was once the director of international business development at DoubleClick, the Internet advertising company bought by Google — and venture capital and a brief stint as a lawyer. In addition to his law and MBA degrees from University of Toronto, he also has a master’s degree in international public policy from Johns Hopkins University’s School of Advanced International Studies, based in Washington, D.C. And while he’s a Canadian citizen, the 9/11 attacks shook him so deeply that he made a switch to the policy world. Dubowitz initially joined FDD to help manage the organization and its finances, but his interest in the Middle East and Iran, in particular, combined with his background in business and finance, soon led to research into the innovative financial penalties the Treasury Department was pioneering to help pressure Iran’s mullahs and bring their oil-dependent economy to its knees.
Over the last 10 years, the organization has bulked up considerably, adding a former CIA specialist on Iran and two other Farsi speakers as well as a onetime Treasury official with expertise in illicit finance and an investigative reporter from the Wall Street Journal with a deep knowledge of sanctions and financial markets.
Their work has caught the attention of influential policymakers, especially sanctions hawks who have used the research to argue that the White House is being conned by a country that for decades has dubbed America “the great Satan” and has threatened to wipe Israel off the face of the map.
Sanctions hawks have used the research to argue that the White House is being conned.
When Republican Senator Mark Kirk of Illinois, one of Congress’s biggest sanctions cheerleaders, argued in November that the West’s interim deal with Iran would grant the mullahs a windfall of ”$20 billion in hard currency to the world’s leading sponsor of terrorism” — far higher than White House estimates — he was citing analysis from Dubowitz. Kirk is now leading the effort to pass a new sanctions law this winter, which Obama has threatened to veto.
The national media has also taken note. As the Iran issue turned into a hot-button foreign policy problem for Obama, Dubowitz and FDD colleagues like Jonathan Schanzer, a former Treasury Department official on terrorist financing, have become go-to sources for the New York Times, AP and others (this journalist has also quoted them in the past).
In typically Canadian fashion, Dubowitz is incredibly self-effacing, deferring any credit for the U.S. tactics that have tied Iran in knots. The congressional staffers who write and pass the policies and the Treasury Department officials who track and blacklist violators are the ones responsible for — potentially — convincing Iran to deal.
But rest assured that as the negotiations with Iran play out in overseas capitals and the debate over the U.S. response rages here at home, Dubowitz and the FDD will continue to play a major — if not always visible — part in that discussio