Closer U.S. oversight of Iran, Venezuela Links Urged

Closer U.S. oversight of Iran, Venezuela Links Urged


By RICHARD LARDNER, Associated Press Writer


The growing relationship between Venezuela and Iran is stoking the nuclear ambitions of both countries and needs to be more carefully tracked by U.S. authorities, a veteran New York prosecutor said Tuesday.

In a speech at The Brookings Institution, Manhattan District Attorney Robert Morgenthau said investigations by his office show Iran is using Venezuela's established banking network to skirt international sanctions and acquire the materials needed for its nuclear program.

At the same time, Venezuelan President Hugo Chavez wants to build a "nuclear village" in Venezuela with Iran's help, according to Morgenthau, who said such a development would be a "destabilizing force" in Latin America.

Despite the global implications of this budding partnership, the United States isn't paying close enough attention to it, Morgenthau warned.

"Generally speaking, nobody is focused sufficiently on the threat of the Iran-Venezuela connection," said Morgenthau, whose New York jurisdiction includes the offices of numerous U.S. financial institutions.

State Department spokesman Ian Kelly said the U.S. is concerned about any suggestion of possible weapons proliferation, especially in the Western Hemisphere. But he said: "We also respect each country's sovereign decision whether or not to pursue diplomatic relations with another country."

Venezuela is not under U.S. or international economic sanctions. That means U.S. banks processing wire transfers from Venezuelan banks rely on their Venezuelan counterparts to ensure the exchanges are for legitimate purposes, Morgenthau said.

"I have little faith that this is being effectively done, and the Iranians, aware of this vulnerability, appear to be taking advantage of it," he said.

In early 2008, Iran opened in Caracas a subsidiary of the Export Development Bank of Iran. Last fall, the Treasury Department's Office of Foreign Assets Control imposed economic sanctions against both banks for providing financial support to the military organizations responsible for Iran's nuclear program.

Still, Morgenthau said he believes Iran's Caracas subsidiary has ties with banks in Venezuela and in Panama, which has a reputation as a center for money laundering.

Morgenthau said Iranian-owned and operated factories have sprung up in remote and undeveloped areas of Venezuela. While there's little known about what's going on inside these plants, "we should be concerned that illegal activity might be taking place," he said.

Morgenthau cited cases his office has recently pursued that underscore the lengths Iran will go to avoid sanctions aimed at curbing its nuclear program.

One involved a bank in the United Kingdom, Lloyds TSB, that altered wire transfer information to hide the identity of the clients, which were Iranian banks. This process, known as "stripping," allowed the illegal transfer of more than $300 million of Iranian cash through financial institutions around the world, including the United States.

Morgenthau said information gathered through ongoing investigations reveals that the Iranians, with help from Venezuela, "are now engaged in similar economic and proliferation sanctions-busting schemes."