The Cable

Clinton: Taliban more likely to negotiate after bin Laden death

Secretary of State Hillary Clinton said on Wednesday that Osama bin Laden's death could advance the effort to reach a political resolution to the war in Afghanistan, because it might convince the Taliban and al Qaeda to come to the negotiating table.

"In Afghanistan, we have to continue to take the fight to al Qaeda and its Taliban allies. Perhaps now they will take seriously the work that we are doing on trying to have some reconciliation process that resolves the insurgency," Clinton said on Wednesday to a conference of editorial writers at the State Department. "So our message to the Taliban hasn't changed; it just has even greater resonance today. They can't wait us out, they can't defeat us; they need to come into the political process and denounce al Qaeda and renounce violence and agree to abide by the laws and constitution of Afghanistan."

Clinton said that bin Laden's death would make al Qaeda and the Taliban more likely to strike a deal in Afghanistan because they will have no grand leader to rally around.

"Well, a lot of people say, well, [bin Laden's deputy Ayman] al-Zawahiri will step into it. But that's not so clear. He doesn't have the same sense of loyalty or inspiration or track record," she said. "I mean, bin Laden was viewed as a military warrior. He had fought in Afghanistan. He wasn't an intellectual. He wasn't just a talker. He had been a fighter, so he carried with him a quite significant mystique."

"The Taliban did not give up al Qaeda when President Bush asked them to after 9/11, because of Mullah Omar's personal relationship with bin Laden. That's gone, so I think it opens up possibilities for dealing with the Taliban that did not exist before."

At least one Pakistani Taliban group, Tehrik-e-Taliban (TTP), has already said that it is planning to increase attacks in the wake of bin Laden's death -- and will not come to the negotiating table. "Now Pakistani rulers, President Asif Ali Zardari and the army will be our first targets. America will be our second target," TTP spokesman Ehsanullah Ehsan said on Tuesday.

And Imran Khan, leader of Pakistan's Tehrik-e-Insaaf party said on Tuesday that the United States has transformed bin Laden into a martyr.

"For all these people who think the U.S. is not fighting terrorism but fighting Islam, [bin Laden] will become a holy warrior and an inspiration for legions of jihadis. All it will do is increase extremism," he said.

But Stephen Biddle, senior fellow at the Council on Foreign Relations, said that the Afghan Taliban, namely the Quetta al Shura, might be more amenable to negotiations than the Pakistani Taliban, because they are the ones getting hammered by U.S. forces and are suspected to be internally divided over whether or not to maintain their alliance with al Qaeda.

Quetta al Shura's only statement on bin Laden's death so far was to express doubt that he was really killed.

"Negotiating with the Quetta al Shura Taliban is easier without the personal commitment of Mullah Omar to Osama bin Laden as a constraint. The only question is how much easier. I'm inclined to think there are a lot more barriers than just this," Biddle said.

"There has been plenty of speculation that the field command in Afghanistan and the high command in Pakistan have been experiencing deepening schsms."

Clinton also said that the administration would try to use the bin Laden death to make the case that now is not the time to cut funding for diplomacy and development at the State Department and USAID.

"We're going to be working to bolster our partnerships even now, particularly as people are digesting this news. We're going to look for ways to put this into the context of the larger debate we're having here at home about what it takes to stay engaged in the world," she said.

Clinton argued that the Obama administration's increased funding for State and USAID helped in the mission to find and kill bin Laden, although she didn't give any details on how State was involved in the overall mission to find and kill bin Laden.

"Our tools were so much better [than in the previous administration] and our relationships had evolved in a way that enabled us to obtain information that was actionable. So it takes funding and it takes resources, and it takes having those person-to-person connections that really make a difference," she said.

Asked about how the killing of bin Laden would impact the wave of democratic revolutions sweeping the Arab world, Clinton said the final impact was unpredictable but that the United States could influence how the region digests the news.

"Up until now, the Middle East and North Africa have been very focused internally, what were they going to do in Egypt to navigate their revolution, what was finally going to happen in the other places," she said. "This is an event that breaks through that, but which way it breaks is not clear yet.  If we can keep the emphasis on his extremist ideology, his use of violence is not what brought about the Arab spring, I think we can begin to shape how people think about it."

AFP/Getty Images

The Cable

Will the Treasury Department go after Iran’s banking friends?

Seven Republican senators are demanding that the Obama administration take tougher measures to punish banks still doing business in Iran, and they are threatening to stall the nomination of a top Treasury Department official unless they get their way.

The dispute between the White House and Congress revolves around implementation of the Comprehensive Iran Sanctions, Accountability, and Divestment Act (CISADA) of 2010, the wide-ranging law signed into law last year. The Treasury Department issued a draft rule last week that lays out how it intends to implement a key provision of the law, which deals with Iran's banking partners in countries around the world. And that rule raised the ire of seven GOP senators, who expected Treasury to enforce the law much more stringently.

The key provision, section 104(e), directs the administration to punish any international financial institutions still doing business with Iran by cutting them off from the U.S. financial system.

"We were extremely unhappy with the draft rule to implement section 104(e) of CISADA publish by the Treasury Department last week," wrote Sens. Jon Kyl (R-AZ), Mark Kirk (R-IL), Roger Wicker (R-MS), David Vitter (R-LA), Jerry Moran (R-KS), Mike Crapo (R-ID), and Mike Johanns (R-NE), in a previously unreported letter sent Tuesday, and obtained by The Cable.

The letter was addressed to David Cohen, the acting undersecretary for terrorism and financial intelligence at the Treasury Department. Cohen took over for Stuart Levey, the previous sanctions chief at Treasury, who moved on to the Council on Foreign Relations last month after more than 4 years on the job.

The senators are threatening to hold up Cohen's nomination if their demands regarding enforcement of the sanctions provisions aren't met. Cohen had his confirmation hearing before the Senate Banking Committee on Tuesday and, afterwards, Kirk sent Treasury a list of follow-up questions he says must be answered before he'll allow Cohen's nomination to move forward.

"The acting undersecretary's response to our letter and questions for the record will weigh heavily in any confirmation decision," Kirk told The Cable.

Kirk also identified 44 international financial institutions servicing Iranian banks and 18 U.S. institutions that are working with those who do business inside Iran. He got this list from a 2010 report entitled "Iran's Dirty Banking", which sourced the information to the Banker's Almanac.

Kirk wants Treasury to require all U.S. banks to certify that any foreign banks they deal with aren't dealing with Iran. He also wants those foreign banks to certify that any banks they are dealing with aren't doing business with Iran. But Treasury's current plan calls for banks to provide such information only if and when the Obama administration asks for it.

"The object is to make sure we are doing anything and everything we can to drive Iranian business out of our banking system and this is how to do it," one senior GOP senate aide said.

"Large American banks and foreign banks that are operating here have not been hauled before Congress and have not been forced to tell the people and shareholders why they have not complied with the law," said another senior GOP aide.

Specifically, the aide said that the senators who signed the letter want Treasury to publish a final rule on implementation of the provision that requires audits of all banks' interactions with Iran on an ongoing basis. If that happens, the Cohen nomination can go through.

All of the senators who signed the letter, except for Kyl, are on the banking committee.

In his Tuesday testimony, Cohen defended the Treasury Department's efforts to tighten the noose around Iran's banking sector, including the passing of U.N. Security Council Resolution 1929 and subsequent successful efforts to convince European and northeast Asian countries to drop their Iranian banking ties.

Since 2006, Treasury has sanctioned 20 Iranian state-owned banks involved in facilitating Iran's nuclear program for penalties, and officials have traveled the world to try to convince foreign governments to take similar actions.

Cohen also said that sanctions against foreign owned banks that are working with Iran aren't necessarily the best tool in all cases, and indicated that there are more penalty decisions coming soon, such as the designation of more third country banks.

"The first best option is to get them to stop. Our second best option is to apply sanctions. And without getting too much into the details of any particular investigation that we're conducting, I can tell you that we are, I would say, close to a decision point on several institutions," he testified.

Matthew Levitt, a former deputy assistant secretary for intelligence and analysis at the Treasury Department and now a senior fellow at the Washington Institute for Near East Policy, said that Treasury was not against congressionally mandated sanctions, but believes they should only be used after all efforts to persuade foreign banks to shape up fail.

"What you have here is a struggle between two branches of government trying to get the same job done, but using two different paths to the same end," he said. "In some instances, it may be, you will get more compliance if you don't hit them with the hammer."

Levitt also defended the Treasury's efforts to put pressure on Iran's financial activities. "It's almost silly for anyone to claim the Treasury Department has been soft on Iran," he said.