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Iran's Global Foray Has Mixed Results
By STEVE STECKLOW and FARNAZ FASSIHI
MONKEY POINT, Nicaragua - Last year, a
delegation of Iranians and other foreigners
arrived at this tiny, remote coastal village
in speedboats. They came to map out plans to
build a $350 million deep-water port and a
new city.
The three-dozen families who live here
weren't pleased to see them. For more than
two hours, they say, they berated the
Iranians for not consulting them first about
the development, and they videotaped the
clash. "We said we would defend our homes
with guns, knives, machetes, whatever," says
William Claire Duncan.
The Iranians haven't been back since.
Iran's President Mahmoud Ahmadinejad has
described his oil-rich nation as a
superpower with worldly ambitions. Since
taking power in 2005 he has signed scores of
trade agreements with African and Central
and Latin American countries, opened a
Venezuelan bank, and built factories and
housing projects.
On Sunday, Iran said it test-fired
short-range missiles, just days after it
confirmed it is building a second
uranium-enrichment facility. It's all part
of an Iranian campaign to project power and
greatness world-wide -- including in
America's own backyard.
But a close, on-site examination of some of
Iran's projects on two continents -- in
Nicaragua, Venezuela and Senegal -- reveals
mixed results.
Some efforts, like the one at Monkey Point,
which was announced by Nicaraguan President
Daniel Ortega more than two years ago, so
far haven't materialized. "The Iranians have
promised a lot but have delivered very
little," said a Western official in
Nicaragua.
Other investments sometimes seem to make
little economic sense. For example, Iran
Khodro, a state-owned Iranian auto maker
that spent tens of millions of dollars
opening factories in Venezuela and Senegal,
recently required a $1.4 billion
Iranian-government bailout.
The Senegalese plant, SenIran Auto, produced
only 20 cars in its first three months of
this year, plant officials there say, well
short of the thousands they had been
expecting to produce by then.
No one knows the true intent of Iran's
widening activities abroad. Interviews with
diplomatic officials suggest Western
intelligence is very limited.
Iran's longstanding financial ties to
Hezbollah, a Lebanese Shiite militant group,
create some concern that Iran is quietly
developing an infrastructure to strike the
West if it is ever attacked by the U.S. or
Israel.
Another worry: On Friday, Venezuela's mining
minister, Rodolfo Sanz, said Iran is helping
the country test and survey its uranium
reserves. The U.S., Britain and other
countries have accused Iran of trying to
develop nuclear weapons, which Iran denies.
"Their activities require watching," says
Robert Morgenthau, the Manhattan district
attorney in New York City, who gave a speech
this month in Washington warning about
Iran's "cozy financial, political and
military" ties to Venezuela and its leftist
president, Hugo Chávez.
Mr. Morgenthau's office has been
investigating banks that allegedly have been
involved in circumventing U.S. sanctions
against Iran.Iran denies any links to
terrorism. In a letter to Mr. Morgenthau,
Bernardo Alvarez Herrera, Venezuela's
ambassador to the U.S., called the speech
"simply outrageous" and "irresponsible."
Some experts believe Iran mainly wants to
build a global coalition of anti-American
nations to support its interests at the
United Nations. A diplomatic source in
Caracas suggested trade was another motive.
"You can't necessarily assume that
everything that happens here has a
terrorism-related purpose. The Iranians
definitely have an incentive to make money."
Alireza Salari, Iran's deputy foreign
minister for Americas affairs, said in an
interview that the point of its foreign
policy is to show "it does not need the
United States to survive."
"Iran's international prestige today is
higher than ever," he said. "Everywhere you
go in the world they recognize Iran's name,
they know our president's name."
Distrust over Iran's intentions can be seen
in Venezuela, an oil producer with an
inflation-ravaged economy. Mr. Chávez, who
visited Tehran this month, has embraced Mr.
Ahmadinejad. Iran has financed a variety of
Venezuelan development projects making
everything from tractors to dairy products,
government officials say.
There's a weekly flight from Tehran to
Caracas. The number of Iranians living in
the Venezuelan capital has swelled to about
2,000 from under 200 since the flights began
two years ago, says an Iranian businessman.
The Venezuelan Embassy in Washington, D.C.,
said it couldn't confirm the numbers.
Mr. Chávez's critics claim the Iranian
factories may have darker purposes. The
plants include Fanabi, a joint
Iranian-Venezuelan bicycle factory in
Tinaquillo, about a three-hour drive from
Caracas.
Mr. Morgenthau referred to factories like
this in his recent speech. Given their
placement in "remote" areas and their
"secretive nature," he said, "we should be
concerned that illegal activity might be
taking place." However, he said, evidence is
"limited."
Although there are suspicions in diplomatic
and other circles about the real purposes of
some of the Iranian-financed factories and
projects, so far there is no hard evidence
that they are anything other than what they
claim to be.
Ambassador Herrera responded in his letter
to Mr. Morgenthau: "What you refer to in
your speech as 'suspicious factories' are
providing Venezuelans with food,
transportation and agricultural equipment,"
as well as bikes and consumer goods.
During a reporter's unannounced visit this
month to the bicycle facility -- a bright
red-and-beige building in an industrial park
-- the plant's president, José Aranguren, a
Venezuelan, agreed to provide a tour and
permit photos to be taken. The plant's
Iranian vice president, Reza Dai, declined
to be interviewed.
Mr. Aranguren noted that when the bike plant
opened last year, local opposition
newspapers reported that it "exists to
enrich uranium" and "we were building
bombs." He called the allegations "total
lies."
To poke fun at the claims, Mr. Chávez, who
visited the plant when it opened, suggested
a brand name now used on all bike models:
Atomic.
Iris Cano, a Venezuelan in charge of sales,
opened spreadsheets on her computer showing
that the factory last year sold out its
entire initial production run of 4,860
bicycles.
The company employs 44 workers and offers at
least eight bike models, she said, including
for women, children and one with a large
rear basket designed for deliveries. The
bikes are made from Iranian parts and are
50% subsidized by the Venezuelan government.
Mr. Aranguren calls it "a socialist
enterprise."
The bike factory has hit a serious obstacle
this year. Iran has failed to deliver many
needed parts, and production has dropped
90%, plant officials say. Iran has promised
to deliver enough parts to assemble an
additional 25,000 bikes, Mr. Aranguren says,
but has mainly delivered cartons of frames,
wheels and handlebars, which are stored in a
warehouse down the street.
"We're a bit paralyzed because we don't have
all of our raw materials from Iran," he
says.
In the financial district of Caracas, the
Iranian-owned Banco Internacional de
Desarrollo, or BID, has its own problems.
The U.S. Treasury Department last year
imposed sanctions against the bank and its
parent, the Export Development Bank of Iran,
which it accused of violating U.N. sanctions
by helping Iran procure weapons of mass
destruction. As a result, BID isn't allowed
to do business with the U.S. banking system.
BID's clients include Iranian factories such
as Fanabi and an Iranian company that builds
housing, bank officials say. According to a
sign, it offers checking and savings
accounts, loans and trade finance.
Inside the bank, employees complain the
sanctions mean they can't offer credit or
debit cards to its 200 customers. "I can't
have a relationship with Maestro, Visa or
American Express," says Raymundo Velasquez,
the branch manager. "It's terrible.
According to them, this bank finances
terrorists."
Mr. Velasquez was standing in the gleaming
branch office, which had tellers and a
security guard, but no customers. Upstairs,
in a back office, employees entered data
into computers. The 21 employees include
five Iranians. The bank's Iranian president
declined to be interviewed.
José Antonio Gonzalez, the bank's legal
representative, said the purpose of the
bank, which opened last year, is "to help
all the [Iranian development] projects."
Iran "came here to help in many ways, but
not militarily," he said. Fernando
Illarmendi, the only Venezuelan on BID's
board of directors, said he wouldn't work at
the bank if it was connected in any way to
weapons.
Mr. Morgenthau, the Manhattan district
attorney, had suggested in his speech that
BID's purpose was to violate U.S. sanctions
by establishing relationships with foreign
banks that do business with U.S. banks. Mr.
Gonzalez said BID has no such relationships
with foreign banks, and does no
international transactions.
In Senegal, a Muslim country on the western
coast of Africa, Iran installed electric
lines last year to power the town of Touba,
a holy city that attracts hundreds of
thousands of Muslim pilgrims each year. But
Iran's most visible impact here: the arrival
of shiny, new, Iranian-made yellow taxis.
They stand in stark contrast to the city's
aging fleet of rickety vehicles with dented
doors and broken lights.
"Everyone now knows Iran because of the
cabs. We go to a remote village, and
children run after our car shouting 'Iranian
car, Iranian car,'" says 53-year-old Modou
Sogk, chairman of the taxi-driver
association, who owns an Iranian cab and
hopes to buy a second one.
Still, Iran has fallen behind on its promise
to help phase out Dakar's 25,000 cabs.
Senegal and Iran had an agreement to replace
2,000 taxis by the end of last year, but so
far only about 500 have been delivered.
Many other planned ventures, including a
storage facility for Iranian oil, haven't
materialized. The project is currently
suspended due to high costs, according to
Mamadou Diop, Senegal's minister of
commerce.
Meanwhile, an Iranian-built $75 million auto
plant in Thies, which opened last year,
produced only 20 cars in this year's first
quarter when the goal was to produce 80% of
the targeted annual output of 10,000 cars by
middle of this year, plant managers say.
Managers say they suffered from delays in
opening the factory, a lack of spare parts
and a shortage of skilled workers in
Senegal.
Even if production increases, "the project
has no economic return, and maybe it never
will," says Hassan Davoudi Deilami, the
plant's financial manager. He says the
factory's purpose is simply to give Iran a
presence in Africa.
Iran is producing more cars in Venezuela. A
Venezuelan official at the factory says the
plant, called Venirauto, currently makes six
cars an hour. Customers drove off with two
of the small sedans, the upholstery still
covered in plastic, when a reporter showed
up earlier this month.
Despite an overall shortage of new cars in
Venezuela, the Iranian cars are available
only to government ministries, the official
said. He described the factory as a "social"
program not intended to make a profit.
One man, standing outside a security office
at the factory gate, said he had traveled
eight hours on a bus hoping to buy one of
the cars. He said he was convinced the only
way was "knowing somebody or bribing
someone." A few minutes later, a security
official told him none were for sale to the
general public.
Unlike Venezuela and Senegal, Nicaragua so
far appears to be mostly a case of
unfulfilled promises. Despite a host of
projects announced by the Iranian and
Nicaraguan governments -- their presidents
have exchanged visits -- "this so-called
relationship has given nothing close to the
expectations" for Nicaragua, says Felix
Maradiaga, a political-science professor at
Nicaragua's American University who has
monitored the proposed projects.
Mr. Maradiaga tracked more than two dozen
projects publicly discussed in 2007 and 2008
by either Nicaragua's President Ortega or
Iranian officials, including several power
plants, a giant housing project for the
poor, and milk-processing plants. The
announced projects totaled about $1 billion
in investments, he says.
To date, he says, the only project under way
is a $1.5 million hospital. Construction
began this month.
Officials in Nicaragua's Foreign Ministry
declined to answer questions for this
article.
Back at Monkey Point -- part of an
English-speaking, autonomous region along
Nicaragua's Atlantic Coast -- the residents
are still puzzled over the delegation that
arrived by boat in March 2008.
"They said they were told this was just
jungle," says Allen Clair, vice president of
Monkey Point's communal government. He says
about 160 residents made it clear to the
foreigners that this was their land.
"Everybody was yelling at the people."
Mr. Clair says the residents were tipped off
about the visit by a local journalist and
arranged to videotape it. In the film, a man
who identifies himself as "a representative
of Iran" says, "Our goal in coming here is
to attract Iranian investors and
entrepreneurs with the goal of helping the
supportive, resilient and long-suffering
people of Nicaragua."
Local officials say they aren't against
development or Iranians, but want to be
consulted on any development projects. But
the matter may be moot.
"That was the last time we saw them," says
Pearl Watson, the communal government's
president.
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