Sure, there’s plenty of confusion, diplomatic malpractice and dysfunction in Trumpian foreign policy. But on two critical issues it is deadly functional: The administration is focused like a laser beam on
- irreversibly burning U.S. bridges to Iran and
- administering last rites to a two-state solution to the Israeli-Palestinian conflict.
And if you look at the administration’s actual policies, it’s clear they aren’t just meant to overturn President Barack Obama’s actions, but also to create points of no return—so that successor administrations cannot revert to past approaches even if they want to. If the administration succeeds—and it’s well on its way to doing so—it will have fundamentally damaged U.S. national interests for years to come.
The administration has now done a complete about-face. Whatever Trump’s personal inclinations to prove he’s the world’s greatest negotiator on Iran, his hard-line advisers, Secretary of State Mike Pompeo and national security adviser John Bolton, want to get rid of the mullahs who rule the Islamic Republic, not engage them. Pompeo and Bolton are now pulling out all the stops not only to provoke Iran into withdrawing from the Joint Comprehensive Plan of Action—and maybe into a fight as well—but to block a successor from engineering either a broader geopolitical pivot toward Iran or to engage in diplomacy to resolve outstanding U.S-Iranian differences. The administration’s Monday announcement that it will end all waivers of sanctions on countries still importing Iranian oil fits this pattern of relying on coercion and intimidation rather than diplomacy. As for Israel, whatever the president’s personal views on Israeli-Palestinian peace (and during the campaign they were more balanced than they are today), Jared Kushner and his team now seem hellbent on producing a “made in Israel” peace plan that will be dead before arrival and drive the final nail in the coffin of a peace process that is already on life support.
Last year, Pompeo laid out 12 extreme demands that Tehran would have to meet before the Trump administration would agree to re-engage with Iran. The demands would have required Iran to give up all its rights under the JCPOA and to stop pursuing what Tehran sees as its legitimate interests in the region—for example, helping to stabilize Iraq and supporting the government of Adil Abdul-Mahdi to defeat the Islamic State in Iraq. This diktat was swiftly and angrily rejected by the Iranian government.
No amount of economic or diplomatic pressure the U.S. brings to bear on Tehran will force it to knuckle under to these orders. But the administration’s fantastical demands have established a standard that will be used to judge any future nuclear agreement a Democratic, or different kind of Republican, administration might negotiate with Iran, which will almost certainly require both U.S. and Iranian compromises. That means a president who fails to meet these standards will be accused of appeasement, making compromise as well as domestic support for a new agreement far more difficult. The administration is not just killing the Iran nuclear deal; it’s stopping it from coming back to life.
The administration’s decision to designate Iran’s Islamic Revolutionary Guard Corps as a Foreign Terrorist Organization is also willfully and unnecessarily confrontational, and once done, given the hardcore, militant and enduring nature of the IRGC, it will be nearly impossible to undo. A successor administration, if it did try to undo the designation, would find itself vulnerable to the charges of enabling state-sponsored terrorism. The move will strengthen hard-liners in Iran who oppose accommodation with the U.S. and weaken those elements within the country which favor improved relations with America, who will now have no choice other than to remain silent or close ranks behind the IRGC, further diminishing opportunities for future engagement and diplomacy with Iran. Empowered hard-liners will crack down even more harshly on Iranians who want less political oppression, greater respect for human rights, and more political and civil liberties. All these results were no doubt intended by Pompeo and Bolton, and work together with the economic warfare the administration is waging against Iran, which is aimed at provoking internal unrest inside the country that could ultimately lead to a toppling of clerical rule. The imposition of the total embargo on Iranian oil exports, if successful, will inflict even more economic misery on the Iranian people, hardening the perception that the U.S. government is an enemy not only of the ruling regime but also of the Iranian people—an attitude that will make it harder to ratchet down hostility toward America in the future.
In what would deliver the final coup de grace to any normalization of future U.S.-Iranian relations, Pompeo and Bolton are doing everything they can to goad Iran into a military conflict with the U.S.There is a growing risk that U.S. forces and Iranian IRGC units and Iranian-backed militias could stumble their away into an unintended conflict, especially in Iraq or Syria but also in Yemen, where the administration’s unstinting support for the Saudi Arabia’s inhumane and ineffectual military campaign against the Iranian-backed Houthis risks further provoking Houthi missile attacks on the Kingdom, creating a pretext for the Trump administration to come to the Kingdom’s defense.
There are a number of steps the U.S. could take to mitigate the risks of an unintended conflict with Iran. But the administration has failed to create diplomatic or operational arrangements for communications and crisis management with Iran, suggesting that its goal is not to prevent such a conflict but to deliberately provoke one. And predictably, the IRGC designation has met with a hostile Iranian response: The Iranian Majlis (parliament) has declared every American soldier in the Middle East a terrorist. Thousands of U.S. military personnel are now wearing targets on their backs. Because they operate in close proximity to IRCG units and Iranian-backed militias in Syria and Iraq, the odds have increased dramatically that there will be some kind of confrontation with a high risk of escalation. In other words, U.S. actions have helped set the stage for a U.S.-Iranian conflict that could rule out reconciliation for many more years.
A less confrontational relationship with Iran isn’t this administration’s only casualty. It is also doing all it can to kill and bury the long-standing policy of seeking a two-state solution to achieve a conflict-ending settlement between Israel and the Palestinians.
Over the past year, the administration has waged a relentless campaign of economic and political pressure against the Palestinians—
- closing the PLO office in Washington,
- withdrawing U.S. assistance from the U.N. agency that supports Palestinian refugees and
- cutting aid to the Palestinian Authority.
While the details of the Kushner plan have been shrouded in secrecy for over a year, the way his team has operated and leaks to the media suggest a plan that gives priority to Israeli Prime Minister Benjamin Netanyahu’s politics and needs—one that is reportedly heavy on economic issues and light on the core issues of
- refugees and
- Palestinian statehood.
Even if the words “two-state solution” were uttered, the administration’s view of the Palestinian state is clearly a far cry from the size and contiguity that any Palestinian leader could accept as part of a deal. In this way, the Trump administration’s policies don’t just roll back the very idea of a meaningful two-state solution and push the Palestinians further away from engaging seriously in negotiations leading to a settlement. They also, in aligning so closely with Netanyahu’s vision, make a deal much less likely in future.
For example, the administration’s gratuitous decision—untethered from any U.S. national interest—to recognize Jerusalem as Israel’s capital and open an embassy there
- inflicted serious damage on U.S. credibility as a mediator,
- marginalized the Palestinian Authority as a key U.S. interlocutor, and
- subordinated U.S. policy toward the Palestinians to U.S. policy toward Israel.
The administration’s treatment of Jerusalem has drawn a clear hierarchy: Israel’s needs are indisputable and sacred, Palestinian needs are negotiable and worldly. The prospects for a Palestinian capital in East Jerusalem are now more remote than ever: With continuing Israeli efforts to formalize their control over all of Jerusalem and the presence of more than 300,000 Israelis living there, it’s hard to imagine there will be either political or territorial space for the establishment of a real Palestinian capital.
Once annexed, there will be no possibility of any solution that involves separating Israelis and Palestinians, thereby condemning them both to live in a one-state reality that is a prescription for unending conflict and violence. In the cruelest of ironies, the administration’s plan to end the Israeli-Palestinian conflict could extinguish any hope of a diplomatic solution to separate Israelis and Palestinians, and instead guarantee perpetual conflict.
So if the chances of the plan’s success are slim to none, especially in light of the recent Israeli election and the emergence of a very right-wing government, why launch it? The answer is obvious: We believe the administration has defined success in other ways. With zero chance of getting an agreement between Israelis and Palestinians, the administration’s real end game is to fundamentally alter U.S. policy toward the conflict and to do everything possible to raise the odds that no successor can reverse the new ground rules. And there may be no time better than now. Listen to U.S. Ambassador David Friedman—a key influencer of the administration’s policy—at last month’s AIPAC conference: “Can we leave this to an administration that may not understand the need for Israel to maintain overriding security control of Judea and Samaria and a permanent defense position in the Jordan Valley?” he asked. “Can we run the risk that one day the government of Israel will lament, ‘Why didn’t we make more progress when U.S. foreign policy was in the hands of President Trump, Vice President Pence, Secretary Pompeo, Ambassador Bolton, Jared Kushner, Jason Greenblatt, and even David Friedman?’ How can we do that?”
The goal isn’t just to drive a stake through the peace process but to ensure that America’s traditional conception of a two-state solution won’t rise from the dead.
Why couldn’t a new administration truly committed to engaging Iran and pushing forward on a two-state solution simply return to traditional policies? We cannot rule this out; but this possibility faces very long odds, particularly if the Trump administration is in charge until 2024.
Even under normal circumstances with a committed and highly skilled administration, Iran and the Israeli-Palestinian conflict are excruciatingly difficult issues even to manage, let alone resolve. Success depends on leaders America can’t control who have conflicting interests and their own domestic constraints and, in the case of Iran, on bitterly suspicious adversaries; the issues are politically radioactive for all parties and perceived to be existential, too. And the longer these conflicts persist the more entrenched attitudes become and options for progress contract. Indeed, time is an enemy not an ally; and even under the best of circumstances, any number of deal breakers are always present. In its own inimitable way, the administration is well on its way to hanging “closed for the season” signs on both improving relations with Iran and on a two-state solution and, sadly, irreversibly damaging American credibility and national interests in the process.
There are lots of details and surprises to come, but the end game of this presidency seems as clear now as those of Iraq and the financial crisis did months before they unfolded.”
We are now in the end stages of the Trump presidency.” What is it that’s gone on in the last few weeks or months that’s made you think this?
Adam Davidson: For a year and a half now, I’m one of several reporters who’ve been studying intently Donald Trump’s businesses, his relationships with people around the world. And as a rule, this group of reporters finds it increasingly shocking just how flagrant the Trump Organization was in dealing with some of the shadiest—frankly, in cases, purely evil—people who made their money in wildly illegal and corrupt ways.
I do think most Americans, including Trump’s hardcore supporters, have a general sense that this is a guy who isn’t going to be a stickler for the rules, and has probably done some sort of technically illegal things or shady things. But I don’t think the full lawless and also kind of pathetic and lame nature of the Trump business has entered the national narrative in the way I think it should... I’m suspecting, but I can’t say for sure—that Michael Cohen will have recordings or emails that show that the Trump Organization knew they were basically helping fairly evil people continue their crimes by putting the Trump brand on their projects so as to make them less suspicious, I think we’re going find it very hard for an awful lot of Republicans to support... Do you think Donald Trump is a good businessman, as a businessman, setting aside ethics?
No, definitely not.
He has, in sort of financial terms, either lost money or certainly barely made money over the course of his career. So if you start with control of $200 million of your father’s money, and one alternative is you just invest that safely in the stock market, and the other alternative is you do whatever business you do, he has lost compared to that sort of benchmark, at least for much of the time frame that he’s been in business.
So that is just a sign of, “OK, he’s a rich man,” but it’s different to start as a rich man and end up as sort of roughly exactly as rich. That’s less impressive to real business people.
.. The other thing is, especially in the real estate industry, you want to see someone amassing wealth—that over time, their holdings, their empire, is bigger, not smaller, and they’re not going to be taking as wild a risk as they were when they were younger because they’ve been able to amass a kind of sustainable wealth, a bundle of assets that are really worth something.
We certainly see that. There’s certainly plenty of people in New York real estate who, over the course of Trump’s career, have done exactly that. He hasn’t. He’s this brash guy doing big, loud projects in the 1970s, and he’s a brash guy doing less big, less loud projects in the 2000s, and by 2010, he’s basically a failed real estate guy who then starts a new career as, basically, a pitchman.
.. he’s richer than I am, and I know his followers seem to see that as really relevant. But if you look at his peers, if you look at any sensible benchmark, this is not a guy who’s really impressing a lot of people.
.. Regardless of how many bankruptcies he had, or how he’s compared to other real estate developers, he made himself into a universally recognized brand. It seems to me that even most of us who were given $200 million of our father’s money could not do that, so I’m wondering what you think that is and how you think that fits or doesn’t fit with what you say is his not-very-good business sense.
.. Over the course of Donald Trump’s life, branding has become much more central to how American businesses strategize, how they measure their success, etc. To say the obvious thing that everyone points to, Coca-Cola is sugar water that has the Coca-Cola brand on it. But even Boeing and others are very aware of the brand as a central part of their value, and we’ve learned a lot about how to manage brand.
Brands are a new thing. They’re commonly understood to have started probably with Ivory soap, maybe 130 years ago—1879, I think—and have developed into one of the central tools of American business. I think there’s been a dramatic sea-change over the course of the ’70s and ’80s and how we manage brands, how we think about brands.
If the test is simply, “Have people heard of it?” then I guess a lot of people have heard of him. But if the test is, “Has he been able to monetize that brand? Has he been able to turn that into real brand value and sustaining brand value and growing brand value, so that each year the brand itself is worth more?” that is not the case... There are, I think, 14 Trump hotels in the world, and that’s a fairly stable number. When you look at the projects that he’s been doing over the last decade, there was an attempt at a Trump Baku, Azerbaijan, an attempt at a Trump Mumbai, an attempt at a Trump Uruguay. It’s nothing like the incredible expansion of Four Seasons or Ritz-Carlton.
From a branding standpoint, it’s a pretty pathetic business, and we saw that in the just throwing his name on anything, no matter how peripheral or lousy the product is. I think one of the many things we can learn from Trump support is that a lot of people conflate fame with success, and trappings of wealth with actual wealth.
.. [Michael Cohen’s ] main job was not as a lawyer of any kind. His main job was as a deal-maker, as a guy who would travel the country and the world looking for possible projects, looking for partners who might want to get the Trump name on their hotel or buildings.
Within the Trump Organization, that was a very clearly distinct role—the deal-maker versus the lawyer role—and that was his primary role. So the reason I think he’s so significant is there’s this period of very rapid expansion into these overseas licensing deals. It’s sort of remarkable. Between 2006 and then really speeding up in 2010, ’11, ’12, into 2016, they’re just going all over the world. By “they,” I mean three people—Don Jr., Ivanka, and Michael Cohen—and they are signing deals with really famously corrupt people in famously corrupt parts of the world, doing virtually no due diligence that we can tell or that they can claim, and taking some enormous legal risks, all the while saying, “Well, we didn’t know they were bad. We didn’t know the details,” etc., etc... So he will have the email traffic that will tell us what, exactly, is happening. What, exactly, did they know about these partners? How aware were they of these partners’ illegality? Or how careful were they to not know? Because in an American law, being deliberately … it’s called willful blindness. So if I do business with you, and you constantly show up with all the telltale signs of a notorious criminal, and I never ask you, and I ask everyone not to tell me, that’s deliberate ignorance. That’s willful blindness and that’s, essentially, legally the same as actually knowing.
.. We know the role Michael Cohen played in trying to get a Trump Tower built in Moscow several years ago. You’ve been looking at the Russia story and at the Trump business story, and earlier you referred to journalists who are on the beat of the Trump business story. To what degree do you think that these are going to eventually meld and become the same story?
.. I think the bigger story is the Trump business story, and the Russia stuff is a subset of that. Look, Donald Trump is somebody who’s been trying to score big through business since the 1970s or 1960s. He’s a guy who’s been trying to make it politically for a couple years. So I’m pretty sympathetic to the argument that this really was not a presidential run. This was an effort to burnish his brand, to sell more properties around the world, and specifically to get a Trump Tower Moscow. I think that was a major, major goal for Donald Trump for reasons that still don’t quite make a lot of sense.
.. When the Paul Manafort charges broke and it became clear how much illegal activity he was engaged in, separately from his work on the Trump campaign, it was pretty striking that a guy like this could go around, and commit this many financial crimes overseas, and still be a lobbyist and work in Washington. Have you been shocked at how much white-collar crime seems to go unprosecuted or investigated until it is closely examined?
Yeah. It’s been really upsetting. I think one of the key lessons of all of this is just how little we prosecute white-collar crime in general, and particularly international white-collar crime
.. I will say, even in that Trump is an outlier, that the Trump Organization took risks, did work with partners that very few Americans would ever consider working with. So I don’t want to give the impression that he’s just run-of-the-mill, he’s just like everybody else, because that’s something I hear a lot, and that always drives me crazy. He’s not.
.. That’s not because, necessarily, all business people are moral. It’s because business people are supposed to be good at balancing risk and return. Take the Mammadovs that he did this deal in Azerbaijan with. As far as we can tell, Trump made $5 million or so from that deal. If he had done his due diligence and if he had learned, as he would have, that they were likely to be money laundering partners of Iran’s Revolutionary Guard, he faced a life-changing amount of fines and potential criminal liability. If you’re a billionaire, as he claims, then you shouldn’t do that for $5 million. It’s an absurd risk to take. It makes no sense at all, and we see him taking such risks again and again and again. So he really is an outlier. He’s not like everybody.
Before long though, Caspian stopped allowing withdrawals. After three months, it stopped paying interest. Finally, in May, it shut its doors for good — becoming one of the largest in a long series of failures of Iranian financial institutions in recent years.
.. The outpouring of anger was directed not only at President Hassan Rouhani, who won re-election promising to revitalize the economy, but also the country’s supreme leader, Ayatollah Ali Khamenei.
.. The cascade of defaults, economists say, was not just the result of risky banking practices, but also a case study in official corruption — a major reason Iranians found their losses so infuriating. Adding to their outrage, Iranian officials made a series of statements blaming the victims for not being more careful with their money.
.. Many of the institutions, including those that merged in 2016 to form Caspian, were allowed to gamble with deposits or run Ponzi schemes with impunity for years, in part because they were owned by well-connected elites:
- religious foundations, the
- Islamic Revolutionary Guards Corps or
- other semiofficial investment funds
in the Iranian state.
.. as many as hundreds of thousands of people lost money because of the collapsing financial institutions. Iranians have a term for the growing class of victims: “property losers,” or “mal-baakhtegan” in Persian.
.. regulators have quietly steered many of the companies into mergers with larger banks to try to absorb their losses, but that has created a worsening problem of bad loans and overvalued assets throughout the banking system.
.. Economists say that as many as 40 percent of the loans carried on the books of Iranian banks may be delinquent.
.. Even Iran’s supreme leader, Mr. Khamenei, has acknowledged responsibility for the growing number of victims of “problematic financial institutions.”
“These appeals must be dealt with and heard out,” he said this month. “I myself am responsible; all of us must follow this approach.”
.. The corruption underlying the bank failures has long been an open secret
.. The loans totaled $1.9 billion, and almost all appeared to be held by well-known insiders.
.. Among them was Hossein Hedayati, a business tycoon and former member of the Revolutionary Guards, whose swift rise was so conspicuous that websites speculated about the sources of his sudden wealth. The document released by the lawmaker showed that Mr. Hedayati owed $285 million, and in a television program discussing the loan, another lawmaker, Mohammad Hassannejad, accused Mr. Hedayati of using a series of front companies to swing the loans and hide his role.
Mr. Hedayati dialed in to the program, sputtering with rage; he denied borrowing from Sarmayeh and threated to “sue everyone,” but has yet to follow through on the threat.
.. Clerics controlled religious foundations, called bonyads, that acquired commercial businesses. The largest of these, under the supreme leader, now makes up “15 to 20 percent” of the Iranian economy
.. All the semiofficial holding companies have major advantages over private businesses in favorable access to capital, tax exemptions and political connections.
.. But under a conservative president, Mahmoud Ahmadinejad, who came to power in 2005, semiofficial bodies controlled by clerics, the Revolutionary Guards or their allies dominated the newly private financial sector.
.. the Revolutionary Guards controlled at least two, while the army, the police, the municipality of Tehran and a giant religious foundation close to the Guards controlled the others.
.. the largest were usually run by individuals close to the same ruling elite
.. They say that made it almost impossible for even the best-intentioned regulators to police the banks.
.. The outsize returns promised by the banks and financial institutions lured capital that might better have gone to more productive uses
.. leaks about the high salaries of executives at state-run companies
.. The government has since tried to block the use of Telegram in Iran
The unnamed woman is one of countless Iranians who say their savings have been wiped out by the collapse of fraudulent businesses and unlicensed credit institutions in recent years. Economists are now pointing to the abrupt closure of these poorly regulated institutions as laying the foundation for the unrest that struck Iran starting in late December.
.. “Banks are shutting down without any kind of notice, and it’s creating a huge political and economic backlash at a local level,” said Suzanne Maloney, senior fellow on Middle East policy at the Brookings Institution.
.. it seems to have tapped into a deep sense of alienation and frustration, that people aren’t just demonstrating for better working conditions or pay, but insisting on wholesale rejection of the system itself.”
.. the average budget of Iranian households declined by 15 percent from 2007 — when the U.N. Security Council adopted some of its toughest sanctions on Iran — to 2016.
.. Iranian President Hassan Rouhani, a relative moderate who was reelected to a second term in May, has carried out a program of fiscal austerity. It has brought down inflation but hurt job growth
.. Rouhani has also imposed what Salehi-Isfahani called “regressive policies,” such as raising energy prices while shrinking cash transfers that the poor use to pay for essential items.
.. Other new policies have favored businesses and the middle class, whose members predominantly reside in the capital, Tehran
.. Iran has seen a “divergence in living standards (measured by per capita expenditures) between Tehran on one side and the rest of the country on the other
.. The budget envisioned steep cuts for cash subsidies to the poor, while increasing fees for things like vehicle registration and traveling abroad.
.. Rouhani’s budget was also notable because it was the first time the government made public the funds allocated to Iran’s wealthy religious foundations — as well as its powerful military and paramilitary forces.
.. The disclosure of an $8 billion budget for the Revolutionary Guard Corps, Iran’s most influential security body, prompted sharp criticism from protesters who objected to government spending on Iranian involvement in regional wars, including in Iraq and Syria.
.. Religious foundations, many of which are tax exempt, also got a boost in the new budget, including, for example, a 20 percent increase for representatives of the supreme leader, Ayatollah Ali Khamenei, posted at Iran’s universities.
.. Rouhani sold the nuclear deal to Iranians as crucial for reviving the ailing economy. Iranians have been disappointed that growth has not been faster, including 74 percent who said in July that there had been no economic improvement as a result of the deal