The Cable

Obama Admin: More Iran Sanctions Will Fracture Anti-Nuke Alliance

The Obama administration has spent weeks asking Congress to hold off on imposing new sanctions to avoid giving Tehran a reason to walk away from the current nuclear talks. On Friday, the administration rolled out a new rationale. They warned that the measures could harm Washington's relationships with its key negotiating partners in Geneva as well.

The White House's willingness to unfreeze billions of dollars in Iranian money in exchange for Iranian concessions on its nuclear program has sparked skepticism -- and in some cases outright anger -- on Capitol Hill. The White House has launched a full-on lobbying blitz to reassure wavering lawmakers, and the efforts began paying off Friday as key senators who had either raised skepticism about the wisdom of holding off new sanctions or kept silent came out in support of the administration position.

Sen. John McCain, a leading Iran hawk, told the BBC that he's skeptical of talks with Iran but willing to give the administration a "couple of months" before supporting additional sanctions. 

Sen. Dianne Feinstein (D-CA), meanwhile, said she strongly opposed putting additional punitive measures in place against Tehran amid the delicate diplomatic negotiations.  "The purpose of sanctions was to bring Iran to the negotiating table, and they have succeeded in doing so," she said. "Tacking new sanctions onto the defense authorization bill or any other legislation would not lead to a better deal. It would lead to no deal at all."

A senior administration official raised a similar concern, warning that imposing new measures on Iran now risked causing a rupture within the so-called "P5+1" alliance --  the U.S., Britain, France, China, Russia and Germany -- that has maintained the current, hard-hitting sanctions on Iran.

"The P5+1 believes there are serious negotiations," the official said. "They have a chance to be successful. For us to slap on a new set of sanctions in the middle of it they would see as bad faith with them."

It's far from clear that the administration's arguments about the dangers of imposing new sanctions will win the day. On Thursday, Sen. Bob Casey (D-PA) urged the Senate to pass a new round of sanctions in defiance of White House pleas and Sen. Bob Menendez (D-NJ) expressed frustration with the lack of specifics on the deal that he had received in classified briefings with administration officials. Meanwhile, Republican hardliners doubled down in their opposition to the administration's negotiating tactics Friday, with Sens. Marco Rubio (R-FL), Mark Kirk (R-IL), John Cornyn (R-TX) and Kelly Ayotte (R-NH) accusing the administration of giving Iran access to too much of its frozen money in exchange for too few concessions on its nuclear program.

"The American people will facilitate the payment of $20 billion in hard currency to the world's leading sponsor of terrorism and in return accept a more advanced and dangerous Iranian nuclear infrastructure," the senators wrote in a letter to the White House.

The $20 billion figure, an estimate first publicized by the Israeli government, has become a standard talking point for conservative critics of the deal.

The senior administration official said outside estimates of how much Iranian money would be unfrozen as part of a deal were "wildly exaggerated," but declined to specify the White House's own figure.

"It is not $15 billion, or $20 billion, or $30 billion, or $40 billion or $50 billion," the official said. "It is way south of all of that." 

The administration also questioned earlier estimates that there was roughly $50 billion in Iranian money frozen in banks around the world.  A second senior administration official said Iran actually had roughly $100 billion in foreign accounts that it had limited or no access to. The distinction is a critical one because larger overall holdings would make it easier for the administration to argue that it could theoretically free up $10 billion while still keeping the bulk of the Iranian funding locked away.

The administration's release of new details about its talks with Iran came as the White House's chief nuclear negotiator, Wendy Sherman, was preparing to return to Geneva next week for more talks with her Iranian counterparts. The two sides came close to a deal last weekend, but negotiators couldn't bridge long-standing divides over the future of Iran's plutonium-producing facility at Arak and Tehran's stockpiles of enriched uranium.  Administration officials said those disputes still needed to be resolved but said an interim deal was in sight.

"For the first time in nearly a decade, we are getting close to a first step toward a comprehensive agreement that would stop the Iranian nuclear program from advancing and roll it back in key areas," the first senior administration official said. 

The current talks have infuriated Israeli officials, who have accused the Obama administration of rushing towards a flawed deal that would give Iran relief from the West's crippling economic sanctions in exchange for minimal - and reversible - concessions. Israeli officials have said the current deal would only set Iran's nuclear program back by 24 days, while other critics have said the agreement would delay Iran's so-called "breakout time" - the moment at which Iran would have enough nuclear material for a single bomb - by a few months at best.

The administration official tried to lower expectations about the potential deal, describing it as a first step that would delay Iran's progress towards a nuclear bomb but not entirely, or permanently, end it.

"I think it is fair to say that this agreement would extend breakout time," the official said. "Would it by months and months and months and months? Probably not. But it is because it's a first step."


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The Cable

State Department Quietly Reverses Course On Its $500 Million Mexican Embassy

The State Department is planning a new, sprawling embassy compound in Mexico City, but it has quietly scuttled how it was to select a construction firm for it.

The new complex will be erected on eight acres the U.S. purchased in the city's Nuevo Polanco neighborhood, and cost $400 million to $500 million, State Department officials said. The main building will be about 515,000 square feet, making it one of the U.S.'s largest embassies. There also will be a 281,150 square-foot parking garage with space for 665 vehicles, a 70,900 square-foot warehouse and maintenance facility, a 13,850 square-foot residence for Marine Corps embassy security guards, and an 11,300 square-foot facility to securely allow vehicles and pedestrians to enter.

The new embassy will be built in a country in which drug cartels have operated with "near impunity" in recent years, according to newly declassified U.S. documents. They suggest the U.S. is extremely concerned about drug violence, in which more than 100,000 people have been killed or disappeared since 2006, when then-President Felipe Calderón vowed to take on the cartels.

U.S. personnel have come under fire in the process. In one example, two employees from the embassy in Mexico City were wounded about 35 miles south of the city in August 2012 after federal police opened fire on their vehicle. They were reportedly traveling to a Mexican navy base.

In June, the State Department's Bureau of Overseas Building Operations announced that it wanted construction firms to submit qualifications for the new Mexico City embassy in order to pre-qualify them to be involved in the project. It has quietly reversed course, saying its initial solicitation to industry is "cancelled in its entirety" because plans have been altered. The State Department did not explain why in its announcement, but said a new, future solicitation to industry for the project "is under acquisition review.

The project is still moving forward, however. State Department leaders want it completed by 2019.  It's part of a larger overhaul of embassy facilities across the globe spurred by the Secure Embassy Construction and Counterterror Act, which Congress passed in 1999 following the bombing of U.S. embassies in Tanzania and Kenya. The U.S. has opened 108 new diplomatic facilities since, and has an additional 31 projects in planning or under construction, said Christine Foushee, a department spokeswoman. In total, new embassies cost more than $10 billion as of 2010, according to Congress' investigative body, the Government Accountability Office.

In the case of the Mexico City embassy, the State Department decided to swap gears in how it will select a construction firm. The design of the project already has been awarded, but the U.S. needs to determine who will do the construction, Foushee said.

"The Department explored options for utilizing early contractor involvement, but after a careful review determined that a traditional design-bid-build methodology would be better aligned with the timeline and goals for the new U.S. Embassy project in Mexico City," she said in an email to Foreign Policy.

The decision follows a 2009 GAO report that pointed out problems in involving contractors on projects before they were designed. The State Department has frequently used a two-phase "design-build" solicitation process in awarding contracts for new embassies in the past, it said. In the first phase, contractors submit documentation to show how they will meet all qualifications for the project. The department then commonly issues a list of companies allowed to bid on the contract, which awarded with a fixed price.

That has led to problems in which contractors don't have limited time to meet construction deadlines because of the lengthy process to certify embassy design plans, the GAO found. The State Department said at the time that it would consider an alternative options, but continues to use the two-phase process on some projects. The State Department isn't using the two-phase system in New Mexico, however: It's using a three-step "design-bid-build" one, which will create more time for the construction firm selected to complete the work because the plans for it are more concrete.

The State Department also has struggled to find enough qualified contractors to carry out its slate of construction projects. That isn't the case in Mexico, either, Foushee said.