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Among the thorniest issues currently holding the world's attention is the clash between Iran and the United States over Iran's suspected Nuclear Weapons Program. The US though determined to thwart the program, appears to view any negotiations and concessions as unacceptable. And fear that the US is committed to regime change apparently spurs Iranian leaders to push forward ever harder with the covert program in hopes of gaining a nuclear deterrent against US military action. We are very fortunate to have the Cato Institute's Christopher Preble to share his understanding of this complex high stakes conflict and to suggest possible pathways out of the US-Iranian stalemate. Christopher A. Preble is the Director of foreign policy studies at the Cato Institute. Before joining Cato in February 2003, he taught history at St. Cloud State University and Temple University. Preble was a commissioned officer in the United States Navy and he is a veteran of the Gulf War. He is the author of "Exiting Iraq: Why the US Must End the Military Occupation and Renew the War Against Al Qaeda", and "John F. Kennedy and the Missile Gap". Preble's work has been published in major publications including USA Today, the Financial Times, The New Republic, Reason and The National Interest. He has also appeared on many television and radio news networks. Please join me in welcoming Christopher A. Preble. Thank you Mary, thank you all for coming out today. What a great turn out and what a glorious day. I love this city and I had a wonderful time today. Let me tell you I my sister lived here for seven years and was very unconsidered, she moved away. Now I have to come up with a new excuse to come here, well, and I am grateful extremely grateful to the World Affairs Council, Northern California for giving me that opportunity. And aside from those pleasantries I also want to please extend my thoughts on behalf of my colleague Ted Carpenter who was not able to attend, he has sent his regrets. He has taken ill, but this talk and my presence here would not be possible, were it not for Ted. For starters he hired me and has been a mentor of mine for many years. But it was Ted who in September can you hear me. In September I am trying not to lean too much okay, good. Ted Carpenter in September of last year, issued a paper which you all have the outlined various policy options for US policy towards Iran, for dealing with the nuclear program. And then in December my colleague Justin Logan published a second paper weighing the costs and benefit's risks of preventive war versus deterrence. And this program which I am giving tonight has been given by my colleagues and myself in dozen other cities. Thanks in part to the generous support to the Ploughshares Fund, but also from the Cato Institute. And this talk it kind of includes a compilation both of Ted's paper and Justin's paper. But also incorporating what has happened since Justin's paper was published in December and as you all know; events have happened very quickly. And so I am my folder of paper is just getting fatter and fatter every where I go. The just basic principles of what Ted and Justin said forward back in the spring of last year however has not changed and that is the grand bargain. And I want to lay that out very very clearly at the outset. The grand bargain in this case and the grand bargain in any case in a negotiation entails giving up something that is very, very important to you in exchange for your adversary or your negotiating partner giving up something that is very important to him or her grand bargain in any context. And the case we are talking about tonight is coming up with some scenario whereby the Iranians agree to forego nuclear weapons program in exchange for intrusive inspections that ensure they are not diverting nuclear material to weapon's purposes. We offer an exchange, normalization of diplomatic and economic relations with Iran, which we have not had since 1979, but also and this is crucial some kind of a security guarantee. A pledge to the Iranians that we will not use military action to overthrow their government. And so over the course of the next few minutes I want to lay out those options in kind of keeping in mind this grand bargain being in the background because what you what I hope to show over the next few minutes is that none of the options that are available to us are very pleasant or very appealing. Okay, they all have costs and drawbacks and risks. There are no magical solutions. At the same time we need to avoid a sense of panic, because there have been I'll document this there have been numerous instances in the past where predictions were made of Iran's impending nuclear weapon status and those predictions have proved pretty consistently false. So we have time to weigh the policy options and that's what we are trying to do and that's what the whole point of this program has been as to lay those options out. So let me start with the first and that's what we are doing right now. And we have been doing for some time and that is multilateral sanctions, okay. We have imposed now the United Nations has imposed now two rounds of sanctions against Iran. The first imposed in September and then another round early this year, progressively targeting trying to target the regime. Now just at a kind of basic level, sanctions have a very uneven track record, in terms of say with the except the possible exception of the sanctions against the South African apartheid regime in the 1980s which appeared to have some effect, may be not the determining effect but certainly some effect on the South African government agreeing to dismantle the apartheid. Other attempts and sanctions have not proven very successful. And what has happened often times is that the very people you are trying to empower through sanctions, that is entrepreneurs and risk takers in the middle class, are the ones who are hurt most by the sanctions. While as you drive the economy underground and the government becomes very adaptive breaking off the profits from those kinds of things. Saddam Hussein was a master of this among others. Kim Jong-il has also learned quite well how to evade sanctions and enrich himself in the process. And there is talk now of a third round of sanctions that would be more broad based, not so specifically targeted on mainly targeted right now on financial instruments, letters of credit, things like that. They have had some effect, there are some modest effect making it little bit harder for the Iranians to to operate. But have had no demonstrable effect on the Iranian economy and it's really hard to separate, because of course the Iranian economy is rather sporadic and it's kind of hard to separate again it's really hard to separate in cases like in North Korea. Well, how do you separate between how much effect the sanctions are having and how much effect is this because of just incompetence sheer incompetence on the part of the government. But there is now talk of two types of additional sanctions, one would be through the UN Security Council as I was just driving over here today, there was talk on market place in the evening about it seems unlikely that there will be new round of sanctions anytime soon; that is multilateral sanctions endorsed by the UN Security Council. At the same time there are actually some measures afoot in Congress and in the state governments, a kind of divestment campaign to divest assets from Iran. Very similar if you remember that we we had a kind of unilateral divestment campaign against South Africa in 1980s and so that's that's being talked about and interestingly, the Bush Administration, the State Department has warned against imposing a new round of sanctions. In that manner they say they would, kind of undermine the diplomacy they are engaged in right now. So it's interesting, the Bush Administration itself are pushing for another round of sanctions and the UN Security Council is kind of discouraging Congress and the states from going down that row. So it's the first option. The second option is also something we are engaged in already. And that is the undermining the kind of attempt to undermine, subvert the clerical regime in Tehran. We the US Congress passed with a very large bipartisan majority in signing to law, The Iran Freedom Support Act and part of one of the provisions or or provisions of that act are to subvert the government to to aid pro-democracy and anti regime elements inside of Iran such that the government will be brought down. Now for starters, we can say that this all might seem a bit more plausible at least somewhat plausible if we hadn't heard exactly the same arguments prior to Iraq war. In fact the language of the Iran Freedom Support Act even some passages are strikingly similar to the language if the Iraq Liberation Actually; this is where we funded groups like the Iraqi National Congress, Ahmed Chalabi and his friends and what we have learned or I hope we have learned from that experience is that, well some people are very popular in London and the United States, in Washington and are very adapt at convincing policy makers that they in fact speak for the in this case the Iranian people. We we should take those kind of assurances with a large grain of salt. The key difference of course between Iran and Iraq is that we did not try to subvert or actually succeed in subverting the Iraqi government in 1953 as we did in Iran. And trust me when I say that is if not remembered first hand it is taught in the history books quiet well. And not surprisingly because of the US involvement in the overthrow of Mossadeq government in 53' and the installation of the Shah; even many democracy activist inside of Iran say please don't give us money, please don't we will not accept your money. Please do not show support for us, because for us to accept that money would undermine our legitimacy with our own people. It's not unique I should say that is not entirely unique to the case of Iran but I think it is particularly an issue with Iran because of our past history. So we have had kind of checkered record of supporting these kinds of movements in the past, but in Iran it's going to be a particularly difficult thing. And we also know we have $75 million right now annually dedicated to this project which is if you really put it in perspective, it's almost laughing - laughably modest very small what is that about not even a day in Iraq what we spent in Iraq. So it's a very, very small amount of money and yet you know, we have this problem where now, if you stand up against the government you are you are accused of being a stooge of the United States and therefore you are undermining the very people you are trying to empower inside of that country. I will also point out that if the focus of this policy is to eliminate the Iranian nuclear program and the solution is to install or to foster the creation of a democratic government inside of Tehran, I'll remind you there are quiet a number actually of democratic countries that have nuclear weapons. Starting with us of course, and the UK, the French, the Indians, Israelis so just because you are democratic it doesn't mean you don't have nuclear weapons an interestingly enough Iran, when they were ruled by the Shah had a nuclear weapon's program, a very nascent one, but in early stages, why, because Iran is in a dangerous neighborhood. They are surrounded by nuclear armed neighbors Russia, India, Pakistan and not too far away Israel. So it is not inconceivable to me that a democratic government even if we were successful in fostering the over throw of clerical regime, that a democratic government would not be nuclear. Fair enough you might say, well the problem is not that Iran as a democracy would have nuclear weapons. That's troublesome enough. But the issue is the mullahs. It is the fact that it is the nature of the regime and they cannot be trusted with these weapons which is why as the President had said, "A nuclear armed Iran is intolerable." This was the term that's the term he used to describe his approach to the Iranian nuclear program. So then the third option is to preventive war. And I want to dwell on this a little bit as you can imagine. This is the most kind of serious issue at hand. For starters people are a little reluctant to call a preventive war. It sounds rather rather inflammatory that they prefer something like the military option or or some other euphemism like that. But I think we need to be we need to be clear in terms of our terminology. This is preventive war and I will say categorically the of all of the options that are available to us preventive war is the least appealing of the law. The disadvantages vastly out weigh the advantages and if as we lay out this grand bargain; if it turns out that negotiations fail and if in fact Iran moves forward with their nuclear program which I hope they do not do, I think ultimately you will see that the that deterrence is still a better strategy than nuclear wars. So let me let me kind of dwell on that for a few minutes. First of all military action a.k.a war does not does not entail eliminating the Iranian nuclear program. Even the advocates of military action say we'll set it back; we'll set back the nuclear program. Now if you the sophisticated argument is that you set it back for a five or seven or eight years such that a democratic government comes up in the mean time and you either convince the democratic government to diverse themselves on nuclear weapons or you don't worry about the fact a democratic Iran has nuclear weapons. So this is the logic of as far as it goes, this is the logic of the military option. It does not eliminate the weapons; it merely sets the program back. Well let's just take at face value the arguments for why military action would be decisive at least as far as the advocates of military action go and and kind of dwell in that. First of all a successful attack against a nuclear program as dispersed and effectively hidden as Iran's apparently will require very good intelligence, very good intelligence - - yes, I told you I was comedian, right. There is and here is the thing. Our intelligence on Iraq is worse than our intelligence on our intelligence on Iran is worse than our intelligence on Iraq. Yes, it's true. You might not believe me but it's true, okay. And that's really quiet striking because the neo conservatives who are who are some of the strongest advocates of war with Iraq have been very critical of the CIA the CIA's failing, they were critical of the CIA for being opposed to military action and kind of kind of ringing their hands. The CIA was constantly ringing their hands over what would happen after Saddam Hussein was removed from power and they were dismissed as kind of nay sayers and doubting Thomases and pessimists etc. They have also been faulted by the neo conservatives for being wrong on weapons of mass destruction in Iraq. And yet this is the same intelligence community the very same one that the neo conservatives are so confident will deliver the decisive intelligence to target weapons on on the facilities inside of Iran. This is the same one. And it's really quiet striking for example just last year Richard Perle, who is a prominent Pentagon advisor, who is the Chairman of the Defense Policy Board, he served in the Reagan Administration, he says with six or eight B-2 aircrafts those facilities could be eliminated in a single evening those facilities being the Iranian nuclear facilities, in a single evening. There is also this issue about the predictions about where is the state of the Iranian nuclear program. Is it three years away, is it five years away, is it 10 years away and and this is also quiet striking because there have been a series of erroneous predictions by the by the prominent neo conservatives for example, former CIA Director Jim Woolsey predicted in 1993, that Iran will have a bomb within eight to 10 years. Michael Ledeen has been one of the outspoken kind of articulate advocates of overthrowing the regime in Iran. He warned in April 2003 that Iran would be conducting a nuclear test in the summer of 2003. Charles Krauthammer in January 2006 said Iran is probably just months away from the point of no return the point of no return being at which they would have mastered the enrichment cycles such that they could produce enough weapon's grade materials to start building a bomb. It it is interesting. I did stumble upon a quote from Mr. Perle. He was quoted by a foreign policy magazine recently; he was asked, "Five years from now where do you see Iraq?" He was asked about this five years from now where do you see Iraq. Perle; "I am reluctant to make predictions since my past predictions have not turned out very well." At least he admits it. But he doesn't admit it with respect to Iran; quite striking. Suffice to say, that Mr. Perle's suggestion that's six or eight B-2 aircraft could eliminate Iran's nuclear program in a single evening is a gross over simplification, okay. First of all the facilities that we know about for example this these facilities at Natanz, some of them were buried 18 meters under ground. The the GBU-28 which is our most effective conventional bunker buster can penetrate six meters of rock and hardened concrete, so you have to make up 12 meters, how do you do that; with low yield earth penetrating nuclear weapons. Now needless to say, I hope it would be extremely difficult to limit civilian causalities in such a scenario, especially if you think about nuclear weapons in this case and you are penetrating into the ground and you are throwing up even more fall out and radio active dust than you would in an airburst okay. This has all become very this is very contemporary, because I don't know if you all saw it, but earlier this month in the Republican debate in New Hampshire CNN's Wolf Blitzer asked each a number of the candidates, would you dis-evolve, if it came down to a this is what Blitzer asked if it came down to a preemptive US strike against Iran's nuclear facilities, if necessary, would you authorize as President to use of tactical nuclear weapons. This is a fairly straight forward question. Would you authorize the use of tactical nuclear weapons? Duncan Hunter said, we have to keep that option on the table, Giuliani said; we can't rule anything out, you don't take any option of the table. Governor Gilmore, you don't take any option of the table, that having a nuclear weapon is unacceptable. Romney, you don't take options of the table. So you have a fairly a fairly straight forward question, may be too straight forward, considering that we are talking about nuclear strategy and you know, they say "No, we don't take that option of the table." There you have it. Interestingly, the military is not enthusiastic about this. When rumors circulated early last year that the military was tasked with coming up with scenarios for conducting for using nuclear weapons to attack the facilities and there were some thing of a revolt, more recently just earlier this year Admiral Fallon who is the new head of Central Command, said quite categorically there will not be an attack on Iran on my watch. Now I am an ex-military guy, I served briefly courtesy of the United States Navy and I know a thing or two about civilian control, and I am a big believer in that kind of thing and so, there is a certain aspect of this that's troubling to me that the military would be pushing back too hard than the policy makers. On the other hand, I think the military guys might be on to something here and it seems there are two issues that stay. First of all it's the question of proportionality, our military prides itself, on its ability to target strikes and minimize civilian causalities. They take this very, very seriously. Well as I pointed out it's extremely to do that extremely hard to do that when you are talking about using nuclear weapons as bunker busters. The other issue however, is the concern on the part of the military that it would be very, very difficult to limit the strikes to the nuclear facilities and prevent the escalation of those strikes into a wider war. And even more troubling, is the military is not so sure they could win, such a wider war or at least win in any meaningful sense of the term. Let's talk about those military scenarios okay, because Iran has many different ways they can retaliate against us. First of all, they have well, first of all of course, they have their support for terrorism. Now there has even been some suggestions some people have called Hezbollah the A team of terrorism whereas Al Qaeda is like the B team, with farm team. I don't know about that, there has been talk about Hezbollah having sleeper cells inside the United States, most people assume however that it's more likely that Hezbollah and other Iranian terrorist groups would retaliate against US targets overseas. But you can't take off the table the possibility of attacks against the United States. But let's keep in mind of course, that we are extremely vulnerable in Iran's immediate neighborhood. There have been numerous indications, the militias; various militias inside of Iraq are supported by Iran, partly because they are Shia, partly because they are anti American. There is as a whole host of shenanigans going on and and I think at a minimum, you have to assume that the Iranians if they feared rightly, that their regime was under attack and that their survival was at stake, they would have no incentive to hold any thing back and this is kind of the easy option for them, is to the unleash the militias. We have very, very tenure supply lines running through Southern Iraq, from Kuwait to Baghdad, through heavily Shia areas in Southern Iraq. A lot of these trucks are driven by contractors you know; so these people aren't particularly reliable necessarily, foreign contractors even worse perhaps. But then you assigned from the kind of what we think of as terrorism, an isometric war fare, think about what Iran could do in the straits of Hormuz and in the Persian Gulf, okay, about 40 percent of the worlds oil flows through the straits of Hormuz and you know you don't need to shut down the strait, you don't need to close it off solid to raise the cost of shipping if nothing else insurers get a little nervous when they you know a tanker or two is hit and all of sudden, cost of doing business goes up and the tankers decide to go some where else or just not traverse the straits at all. There are also the issue of mines, and again may be this is my navy my navy side of me kicking in but mines make me very, very nervous. These are extremely kind of low tech weapons. These have been around for years and years and years. A very crude mine nearly cut a US warship into half in 1998 in 1988, the Samuel Roberts, which is guided missile frigates really truly very nearly sunk, kept afloat by the heroic efforts of the crew. During the first Gulf war, the USS Princeton which was a guided missile cruiser is still in service and the Tripoli which is an amphibious marine carrier were both put out of mission; they were not sunk, but they were put out of commission for the duration of the war by mines. So in preparation for this anticipating the need to clear the mines in 2003, the British and the Americans worked together to clear the harbor at Um Kasar which is the port near Basra. And it took them about a week to certify that the harbor was clear of mines and safe for shipping. They found 11 mines, 11 mines were sufficient to tie up the assets for a week; the Iranians have 2000 or so mines. So then if there wasn't that enough there are small boats like the small boat that attacked the USS Cole, okay. In 2002 the US military ran a war game called millennium challenge, these war games that the red team, blue team, you assign a guy to be the bad guy, and you say you are the red team, you are the bad guys, figure out the way to win a contest with the blue team, the good guys. And in that in that project they send 16 US naval vessels to the bottom of the sea, at which point the organizers of the game accused the Red team leader of cheating, at which point the Red team leader quit, okay. So he basically said look, you told me to come up with a strategy, if you don't like what I came up with that's your problem, not mine. As I said this is all again may be may be I just get a little hung up about this because you know; the whole Navy thing. But but the Iranians don't have to shut down every thing to raise the costs and raise and consider this, in terms of the price of oil, Cambridge Energy Research Associates estimated that a $5 increase in oil prices, a $5 per bill increase in oil prices will put an additional $85 million per week in Iran's coffers. So those are some of the risks of military action. So let me in the time that I have left, try to talk briefly about the deterrence option, okay, because I have tried to make the case here in the last few minutes that the military option is unappealing on many levels. But at the end of the day if you say well, we hope that negotiations will convince the Iranians to digress themselves of their nuclear program and to save the and to commit to peaceful uses of nuclear technology and nothing else, can they be deterred from using the weapons if they go down that ground. Now for starters, I'll remind everyone that we deterred some pretty odious people during the Cold War like Joseph Stalin and Chairman Mao at the height of the Cultural Revolution, so we have some experience with deterring some pretty well I won't say crazy, but some difficult people, evil people and so the question is are the mullahs so much different than Joseph Stalin and Chairman Mao. Are the mullahs crazy? When you talk about deterrence you have to be very, very specific about this, because you have to be crazy not just crazy crazy like a fox, you have to be suicidal suicidal, because an attack against the United States, any attack against the United States or frankly evidence of a transfer of weapons to terrorists would result in the destruction of your regime. Complete annihilation over. I also point out; the Israelis also have the capacity to retaliate. Even after surviving or after a first strike, because they have developed second strike capabilities, they have missile submarines and other things to allow them to retaliate. So there is notion that you could get off a lucky hit, a lucky strike and succeed without without being completely destroyed is I think not plausible. But you know there have been some people who will say, that's right, well they are not rational, they are not grounded, they are trying to hasten the second coming. Well, we have some evidence that even the most revolutionary; the most fervent believer of all was rational when faced with overwhelming losses. During the Iran- Iraq war, horrible horrible kind of conflict, okay, Iran and Iraq, right after the Iranian revolution this was the test of the new regime in Tehran, child soldiers, mines, chemical weapons, all of it. And even Ayatollah Khomeini when faced with defeat or perpetuation of a very, very long and inconclusive war, suit for peace. When confronted with overwhelming force, even Khomeini backed down. And I think there is no reason to think that other leaders of his ilk of his generation, of his lineage would do the same thing. Let me I have got a few minutes left and we may want to talk about that more in the Q&A, so let me jump ahead, just towards the end to get at the grand bargain one last time, because when I have given this talk, the most one of the most common questions I think I've heard it in virtually every place that I have been to this talk is, why would the Iranians agree to such a deal. Why would the Iranian say okay fine, we put aside our nuclear weapons program in exchange for your promise not to attack us and an exchange for trading relations? Now again Iran has trading relations with most other countries in the world. The only country that they don't have well one of the only countries we are one of the only countries that does not have trading relations with them. So it's not like that they are totally isolated in any sense of the term. Would they take this deal? Well, the truth is we don't know, okay. But the purpose of putting the deal on the table is to try to test Iran's intentions. Why is it that they are moving down this road? I am always struck, by when you talk about nuclear proliferation, people talk about nuclear proliferation, they are trying to get at why do countries develop nuclear weapons? Well I have a different question. Why do countries not develop nuclear weapons? There are dozens of countries, dozens who have the technical capacity; the economic wherewithal to develop nuclear weapons and the vast majority choose not to. Even some countries like South Africa had a nuclear weapons program and they gave it up. Why is that so why? Well, my premise is that part of the reason why the Iranians have a nuclear weapon is for deterrence it's to deter us from attacking them. It's one of the reasons, not the only reason and again, we are not the only ones they are afraid of as I said, they are surrounded by other dangerous neighbors, okay. But this test this puts it on the table and test why is it you are moving down this road? Because if we take away the threat of regime change by military force, then what you need to be deterring for. Same thing applies to North Korea, interestingly; I mean this is the deal by the way that we offer to the North Koreans. And this is the deal that is the foundation for the six party types that are moving forward, I just checked my e-mail before this started and sure enough there is progress Pyongyang on the negotiations. We offered the North Koreans dropping regime change, normalization of economic and diplomatic relations with them, ending the Korean War. That's the deal we put on the table, this is essentially same or similar that we are offering to the Iranians. We just don't know, the great tragedy, truly the great tragedy is we do know that in March no excuse me in May of 2003 in May of 2003, we received the offer of a grand bargain from the Iranians and from the Iranians that's right I said the Iranians, you heard me right. In May of 2003, it's really a striking document, it's just two pages, it almost looks fake, okay. It almost looks fake; because it's just like somebody type this up on the word processor, there is no like symbol or anything. It's kind of a talk you know, there is no you know, property of Iran. It's just talking points, starting point for negotiations. It's a remarkable document, okay. It talks about what they were offered to do. Talk about action against Al-Qaeda and reducing support for terrorism, recognizing the state of Israel in accordance with the Saudi proposal two state solution, disarmament, submission to inspections, all those kinds of things. The great tragedy may be and most people that I have talked to lately is they would not offer the same deal now. Why? Because well, they don't feel like they need to they are feeling rather fool of themselves and with good reason because our position in the region and internationally has been undermined quite dramatically over the last three and a half years. And their position is quite strong. We removed their great rival to the west, Saddam Hussein. We removed not quite as great a rival, but a nuisance in the Taliban, they are gone too. They are happy about that. They have a government in Baghdad that is at least not hostile to them, if not favorably disposed to them. They have a good relation with a number of the parties inside of Iraq. They have reason to believe that their position is quite strong. So why would they agree with the deal. Well, that's that is the great question and the great unknown. But it starts with the United States being willing to put things on the table that we have not put on the table before. And that's the whole point of this. I hope if nothing else, I have made the case if you don't believe that the grand bargain is useful or reliable, I hope at a minimum that I have made the case that military action is the least the least best option the worst option of all because the cost and risks are so enormous, the unintended consequences so incalculable, given what we have learned, I hope, from the Iraq experience, I hope we will not go down that road again with Iran. Thank you very much.