Iran seeking to expand influence in Latin America

January 1, 2012

Iran is quietly seeking to expand its ties with Latin America in what U.S. officials and regional experts say is an effort to circumvent economic sanctions and gain access to much-needed markets and raw materials.

The new diplomatic offensive, which comes amid rising tensions with Washington and European powers, includes a four-nation swing through South and Central America this month by Iranian President Mahmoud Ahmadinejad. His government has vowed to increase its economic, political and military influence in the United States’ back yard.

The visit reinforces recent commitments by Iran to invest millions of dollars in economic development projects for the region, from a mining joint venture in Ecuador to factories for petrochemicals and small-arms ammunition in Venezuela.

Iran has also dramatically expanded its diplomatic missions throughout the hemisphere and dispatched members of its elite Quds Force — the military unit U.S. officials in October linked to a foiled assassination plot in Washington — to serve in its embassies, U.S. officials and Iran experts say.

The importance of Ahmadinejad’s visit was underscored last week by Iran’s state-owned Press TV, which said promotion of “all-out cooperation with Latin American countries is among the top priorities of the Islamic Republic’s foreign policy.”

Iran has dispatched a stream of lower-ranking officials to the region in recent months. Ahmadinejad granted a live interview Dec. 13 with Venezuela’s state-owned broadcaster TeleSUR in which he hailed the close ties between the two countries and boasted of Iran’s advances in military technology, including unmanned drones.

“No one dares attack Iran,” Ahmadinejad said in the interview.

With its latest outreach, Iran appears to be seeking to woo back Latin American countries that have grown wary of doing business with Tehran. Iran’s closest ally in the region, Venezuela, had its largest petroleum company hit with U.S. sanctions last year over its ties with Iran. Smaller countries such as Nicaragua and Bolivia have seen little of the millions of dollars in aid promised by Iranian officials over the past decade.

But with Western nations threatening to boycott Iranian oil, the country’s leaders are scrambling to find willing foreign partners who can soften the blow of sanctions and provide diplomatic cover for Iran’s nuclear ambitions, current and former U.S. officials say.

“Iran has been actively working for years to expand its ties and influence in the Western Hemisphere, and it has found willing partners in the region’s anti-American despots,” said Rep. Ileana Ros-Lehtinen (R-Fla.), chairman of the House Foreign Affairs Committee.

Ros-Lehtinen said she was disturbed by Ahmadinejad’s plans for what she called a “tour of tyrants,” saying it would bring “the Iranian threat closer to our shores.”

The visit is expected to include Venezuela, Ecuador, Cuba and Nicaragua, where the Iranian president will be a guest at the inauguration of newly reelected leader Daniel Ortega.

Yet Iran’s efforts in the region also have yielded disappointments. Its Latin American partners do far more business with the United States and other Western nations than with Iran, and most have been reluctant to fully back the Islamic republic in disputes over sanctions or curbs on Iran’s nuclear program.

Some would-be allies also have been disappointed when Iran failed to deliver on promised development projects and joint ventures, such a proposed $350 million deep-water port for Nicaragua.

A report released in November by the Center for Strategic and International Studies, a Washington think tank, questioned whether Iran ever could succeed at building an effective support network in the region, even if it managed to make good on its grandiose commitments.

“While Iran’s overtures to peripheral states have the potential to weaken U.S. attempts to contain and isolate Iran, Tehran’s web is fragile and possibly illusory,” the CSIS report said.

Iran’s ambitions in the region date back at least two decades, and Tehran was linked in the 1990s to two bombings of Jewish centers, including Argentina’s worst-ever terrorist attack in 1994.

Relations between Iran and Latin America began to warm shortly after the 2005 election of Ahmadinejad, who made the region a diplomatic priority. Iran has since opened six new missions there — in Colombia, Nicaragua, Chile, Ecuador, Uruguay and Bolivia — and has expanded embassies in Cuba, Argentina, Brazil, Mexico and Venezuela.

Former U.S. intelligence officials say the presence of Quds Force officers and other military personnel in diplomatic missions enhances Iran’s ability to carry out covert activities, sometimes in conjunction with members of the Iran-backed Hezbollah militant group that operates extensive networks in Latin America and maintains ties with drug cartels. U.S. officials say the Quds Force was behind the alleged plot to hire Mexican drug gangs to assassinate a Saudi diplomat in Washington.

“For Iran to be so active in Venezuela and for the Quds Force to be there can only suggest Iran is serious about asymmetrical force projection into our neck of the woods. If Israel bombs Iran, we may well see retaliatory strikes aimed at U.S. interests coming from these Quds Force guys in South America,” said Art Keller, a former case officer with the CIA’s counterproliferation division.

As diplomatic relations have grown between Iran and Latin America, trade has soared. Iran recently surpassed Russia as the biggest importer of beef from Brazil, a country that saw its exports to Iran surge seven-fold over the past decade to an annual level of $2.12 billion. Commerce with Argentina has climbed nearly as rapidly. Trade with Ecuador leaped from $6 million to $168 million in a single year, from 2007 to 2008.

Analysts argue that an expanded foothold in Latin America also could provide Iran with strategic advantages in its protracted struggle with Western powers. In Venezuela, where President Hugo Chavez is an avowed supporter of Tehran’s nuclear ambitions, Iran has opened bank branches and transportation companies that U.S. officials say enable Iran to circumvent sanctions.

One Iranian-owned bank drew special scrutiny in a study commissioned by the Pentagon’s Defense Threat Reduction Agency. The study, released in May, described Venezuela’s Banco Internacional de Desarrollo as an “opaque” institution with an all-Iranian board of trustees.

The bank, which is now under U.S. sanctions for supporting terrorist networks, operates with only a single branch in Caracas and appears immune from oversight by the country’s regulators, according to the report’s author, Douglas Farah, a senior fellow at the International Assessment and Strategy Center.

Such institutions “afford Iran and its proxy elements state cover and effective immunity for its covert activities,” Farah said in testimony in July to the House Homeland Security subcommittee on counterterrorism and intelligence.

Through them, Iran can achieve such goals as “unfettered access to global banking facilities, ports and airports; mining of precursor elements for WMD and advanced weapons systems fabrication; and a regional base for infiltration and contingency operations aimed at undermining the United States and its interests,” Farah said.

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