Thursday, February 08, 2007

Bush Adopts Plans to Further Pressurize Sudan; US Treasury Would Block Transactions

Bush Approves Plan To Pressure Sudan

Treasury Would Block Transactions

By Glenn Kessler
Washington Post Staff Writer
Wednesday, February 7, 2007; A12

President Bush has approved a plan for the Treasury Department to aggressively block U.S. commercial bank transactions connected to the government of Sudan, including those involving oil revenues, if Khartoum continues to balk at efforts to bring peace to Sudan's troubled Darfur region, government officials said yesterday.

The Treasury plan is part of a secret three-tiered package of coercive steps -- labeled "Plan B" -- that the administration has repeatedly threatened to unleash if Sudan continues to sponsor a campaign of terror that has left as many as 450,000 dead and 2.5 million homeless. But the administration has held back on any announcement of Plan B, even after setting a Jan. 1 deadline, in hopes of still winning Khartoum's cooperation.

The delays have increased skepticism that the administration is willing to risk potential diplomatic and commercial fallout from targeting Khartoum.

The U.S. plan would put pressure on Darfur rebel leaders who have refused to participate in peace talks or who have targeted humanitarian groups operating in the region, officials said. The information on Plan B was provided by officials in four government agencies on the condition of anonymity because the administration had not planned on releasing details yet.

Some aspects of Plan B have already been stealthily launched, such as stationing four U.S. Army colonels last month as observers on the Sudan-Chad border in full view of Sudanese intelligence. The unannounced move was intended as a signal to Khartoum, which the administration accuses of launching a "quiet war" against Chad's government to widen the Darfur conflict.

"I find this all very dubious. They have talked about Plan B, but they have never explained what Plan B is," said J. Stephen Morrison, director of the Africa program at the Center for Strategic and International Studies. "The deadlines have come and gone, and the Sudanese have thumbed their noses."

Andrew Natsios, Bush's special envoy to Sudan, tomorrow will testify before the House Foreign Affairs Committee that the administration has set three triggers that would result in the enhanced sanctions: one, renewed attacks on displacement camps or driving nongovernmental organizations from Darfur; two, stonewalling peace negotiations with rebel forces; and three, refusing to implement a plan pushed by then-U.N. Secretary General Kofi Annan to expand a poorly equipped 7,000-person African Union force into a hybrid A.U.-U.N. force of 17,000 troops and 3,000 police.

"Treasury's plan to block commercial bank transactions connected to the Khartoum regime, even those involving oil revenues, will be only a minor, short-term inconvenience," said Eric Reeves, a Sudan expert at Smith College, who noted that Khartoum has already violated the three triggers since the start of the year. "This element of Plan B only reveals more fully its vacuous nature."

The Darfur conflict broke out in 2003, when African rebel groups attacked police stations and military outposts. The United Nations and human rights groups accuse Sudan's government of supporting a militia known as the Janjaweed in an effort to crush the rebellion. About 2,000 villages have been destroyed across Darfur, and the administration more than two years ago accused the government of engaging in genocide. But the United States has made little progress in ending the conflict or the humanitarian crisis.

Buoyed by booming oil wealth and a close relationship with China, Sudan has shrugged off repeated threats of action. Bush, increasingly frustrated by the impasse, approved key aspects of the plan last month, directing Treasury to come up with a menu of options that would directly affect the government in Khartoum, officials said. Sudan's Arab leadership has fought multiple civil wars with regional groups over the country's oil and other resources, and U.S. officials believe Sudan's leaders are fearful of any moves that might threaten their grip on power.

Sudan's economy is largely dollar-based, meaning many commercial transactions flow through the United States and making it especially vulnerable to Treasury actions. Indeed, U.S. intelligence, which has stepped up reporting on Sudan in recent months to prepare for a confrontation, believes Khartoum set up a government committee to explore ways of obtaining oil revenues that did not involve dollars, such as barter deals, one official said. Sudan's government has also unsuccessfully sought new oil contracts that would provide for large upfront payments.

The core of the Treasury plan rests on an executive order issued by President Bill Clinton in 1997 that blocked all Sudanese government assets, including companies connected to it, and curtailed financial dealings with Sudanese entities. Bush last year issued a second executive order that blocked the property of people connected to the conflict in Darfur. The existing orders already result in regular freezes or rejections of some Sudanese transactions, but U.S. officials believe they also give the Treasury the authority for an aggressive crackdown on a much larger group of companies connected to Sudan.

Officials hope a ripple effect of Treasury's actions would extend to other countries and companies doing business with Sudan, forcing them to reconsider whether they want to be tainted or, more troubling, subjected to Treasury's scrutiny. "Anything that is controlled by the government we can go after," a senior administration official said. "But the effectiveness will be driven by the participation of our partners," meaning other countries.

Sudan produces about 500,000 barrels of oil a year, which at current market rates is worth about $10 billion. As much as 200,000 barrels are kept for internal consumption, Morrison said, with about 75 percent of the rest sold to China. Partly because some aspects of the plan are still classified, administration officials yesterday were vague about how the plan would cripple Sudan's oil revenues. One official said Treasury will "have the ability to touch things that touch oil revenues."

The regional government of South Sudan, created through a peace deal two years ago, is supposed to get 50 percent of oil revenues. Officials said they think they had designed the plan so it would harm Khartoum but without impacting the government in the south.

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