Iran Influence in Latin America Waning, U.S. Report Says

Iran isn’t actively supporting terrorist cells in Latin America and its influence is waning in the region after almost a decade of promises to increase investment, according to a State Department report.

While Iran’s interest in Latin America is a “concern,” sanctions have undermined efforts by the Islamic republic to expand its economic and political toehold in the region, according to the unclassified summary of yesterday’s report.

“As a result of diplomatic outreach, strengthening of allies’ capacity, international nonproliferation efforts, a strong sanctions policy, and Iran’s poor management of its foreign relations, Iranian influence in Latin America and the Caribbean is waning,” according to the report.

The findings disappointed some Republican lawmakers who say President Barack Obama’s administration is underestimating the threat from Iran. The report comes as the U.S. takes a wait-and-see approach to President-elect Hassan Rohani, who has vowed to seek more dialog with the U.S.

“I believe the Administration has failed to consider the seriousness of Iran’s presence here at home,” said Congressman Jeff Duncan, a Republican from South Carolina who wrote the legislation requiring the State Department report. “I question the methodology that was used in developing this report.”

Chavez Alliance

The U.S. stepped up its monitoring of Iran’s presence in Latin America in a bid to isolate the country over its nuclear program and after President Mahmoud Ahmadinejad forged closer ties with anti-American allies of the late Venezuelan President Hugo Chavez. While Iran’s outreach bears watching, claims about more sinister activities are unproven, said Christopher Sabatini, senior policy director at the Council of the Americas.

“It’s a shame that in such a dynamic hemisphere in which we have so many diplomatic initiatives that for some -- especially Congress -- attention to the region has boiled down to mostly spurious charges about Iranian infiltration,” Sabatini said via e-mail.

Ahmadinejad made repeated trips to Latin America after taking office in 2005, most recently to Caracas to attend Chavez’s funeral in March and the inauguration of his successor, Nicolas Maduro, a month later.

By contrast, Rohani has said little about the region since his surprise victory earlier this month. Instead, he said one of his main foreign policy priorities will be seeking “constructive dialog” with the U.S. and U.K., two nations with which the country has traditionally been at odds.

‘Good Relations’

“We’ll seek to have good relations with all nations, including Latin American states,” Rohani said during his first post-election press conference June 17, in response to a question about the attention he’ll devote to Latin America.

Under Ahmadinejad’s watch, Iran added embassies in Latin America and more than doubled trade with Brazil, the region’s biggest economy. With Chavez, Ahmadinejad signed more than 100 accords to support everything from a campaign to build homes in Venezuela to a joint venture to manufacture bicycles, which Chavez jokingly referred to as “atomic” two-wheelers.

The two countries also established in Caracas the Banco Internacional de Desarrollo, which together with its main Iranian shareholder, Bank Saderat, is accused by the U.S. of being a vehicle for the Ahmadinejad government’s funding of the Middle Eastern terrorist group Hezbollah.

Yet with Iran’s economy crippled by sanctions, many of the projects haven’t gotten off the ground. For example, pledges from 2007 and 2008 to help build a $350 million deep-water port off Nicaragua’s Atlantic coast and an oil refinery in Ecuador have yet to materialize. Nor has it built what former Secretary of State Hillary Clinton warned would be a “huge” embassy in Managua.

That hasn’t prevented the Obama administration from trying to curb Iran’s influence. In 2011, it imposed sanctions on state-owned oil company Petroleos de Venezuela SA for defying sanctions on Iran. It also implicated an Iranian man working out of Mexico in a plot to kill Saudi Arabia’s ambassador to Washington.

To contact the reporter on this story: Joshua Goodman in Rio de Janeiro at jgoodman19@bloomberg.net

To contact the editor responsible for this story: Andre Soliani at asoliani@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.