Iran's "pay-for-performance" state sponsorship

By Matthew Levitt

Earlier today the Treasury Department designated three Iran-based individuals and a Syria-based television station and its Syria-based owner for fueling the Iraqi insurgency (under E.O 13438). The designations are significant on several levels, including the targeting of an Iranian IRGC Qods Force Brigadier General and a television station. But buried in the government's press release is the interesting insight that Iran continues to employ a "pay-for-performance" policy toward its sponsorship of terrorist and insurgent groups.

Iran has long used a performance-based approach to determine the level of funding Iran is willing to provide terrorist groups. As a U.S. court noted in Weinstein v. Iran, the period of 1995-1996 “was a peak period for Iranian economic support of Hamas because Iran typically paid for results, and Hamas was providing results by committing numerous bus bombings such as the one on February 25, 1996.”

Iran’s pay-for-performance funding policy is also evident from its interactions with Palestinian Islamic Jihad. Until Palestinian officials released imprisoned Islamic Jihad bomb makers and terrorist recruiters in 2000 and 2001 (following the collapse of Israeli-Palestinian peace talks), it had been years since Islamic Jihad carried out a successful attack. Islamic Jihad conducted several suicide bombings in 1995 and then not again until September 2000 with the exception of the November 6, 1998, double bombing in the Mahane Yehuda market that injured twenty. Plot after plot failed, either because of terrorist incompetence or successful counterterrorism operations. But once their key operatives were released from jail, Islamic Jihad terrorist activity quickly picked up. In early June 2002, Iran’s Ayatollah Ali Khamene’i met with Islamic Jihad leader Ramadan Shallah on the sidelines of a Tehran conference convened in support of the Palestinian Intifada. Khamene’i pledged to separate Iran’s funding for Islamic Jihad from that of Hizballah and to increase Islamic Jihad funding by 70 percent “to cover the expense of recruiting young Palestinians for suicide operations.” U.S. officials note that in the period following the onset of violence in September 2000, Tehran instituted an incentive system in which millions of dollars in cash bonuses to Islamic Jihad were conferred to the organization for successful attacks. Tehran often demands of its terrorist beneficiaries videotapes or other evidence of successful attacks.

Today's designation establishes that this pay system continues. The significance of this pay system is that it encourages groups to continue carrying out attacks on an ongoing basis to maintain the level of funding it gets from Tehran.

According to the Treasury department,

[IRGC/QF General] Foruzandeh and his subordinates provide financial and material support for acts of violence against Coalition Forces and Iraqi Security Forces. In early-April 2007, Foruzandeh provided $25,000 USD to help fund military operations against Coalition Forces in Salah Ad Din Province, Iraq. Foruzandeh provided the funds to two men claiming to be members of a Sunni terrorist organization in Iraq, promising the men additional funds if they would deliver videos of attacks against Coalition Forces.

Similarly, the Shia extremist network of Abu Mustafa al-Sheibani (one of the individuals designted today), made video of the attacks it carried out"to get money from Iran."

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