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The Chosen One

The Chosen One

Three days after the United States struck a long-fought nuclear deal with Iran, Treasury staffers who worked to help clinch the historic accord gathered to celebrate. They met in the Cash Room, an ornate space inside the Treasury Department that once served as an internal bank, to regale a key tenet of the Obama administration’s assumed foreign-policy legacy. The euphoria soon faded, however, and would be followed by weeks of skepticism from U.S. lawmakers and outright hostility from Israel, America’s top ally in the Mideast.

The July 17 celebration was organized by Adam Szubin, acting Treasury undersecretary for terrorism and financial crimes, according to two officials who attended the event. Szubin helped set up the Obama administration’s crushing Iran sanctions. Now he’s trying to sell the White House’s case for lifting them.

Szubin is in Israel this weekend to lobby Israeli government officials and foreign-policy experts to endorse the Iran deal; U.S. President Barack Obama urged American Jews in a live webcast on Friday to do the same.

Szubin’s argument is likely to fall on deaf ears. Israeli Prime Minister Benjamin Netanyahu is the most vocal opponent of the deal between Tehran and world powers, including the United States. Netanyahu fears the agreement, which would ease bruising economic sanctions against Iran, would give government hard-liners in Tehran enough of a cash windfall to eradicate Israel.

Before heading to Tel Aviv, Szubin said he’ll seek to convince Israeli officials that this will not be allowed to happen. He planned to meet with Netanyahu’s national security advisor, Yossi Cohen; the director-general of Israel’s Foreign Ministry, Dore Gold; and Energy Minister Yuval Steinitz, a leading opponent of the Iran deal.

The remaining sanctions against Iran will be enforced “with all the toughness that people have come to expect from the U.S. Treasury,” Szubin told reporters Thursday, according to a transcript obtained by Foreign Policy. “I expect I will be addressing some of the finer points. So not just which sanctions remain in place irrespective of the [Iran deal], but also how we will be rigorously enforcing them.”

It’s a sell he has struggled to make before. Along with White House Chief of Staff Denis McDonough and top State Department negotiator Wendy Sherman, Szubin wasn’t allowed to conduct a July question-and-answer session about the nuclear agreement when briefing lobbyists from the American Israel Public Affairs Committee (AIPAC), the most powerful pro-Israel shop in the country. Then, on Aug. 5, he had to push back against skeptical lawmakers who also speculated that Iran will receive an immediate financial influx as the deal is enacted.

“There is no ‘signing bonus,’” Szubin said at the Senate Banking Committee hearing.

These were chilly receptions for a man who, on the surface, appears to be universally admired around Washington — a difficult feat in a town filled with backbiting and relentless ambition. His role as an advocate for the Iran deal highlights Szubin’s importance to the White House’s strategy to deal with conflicts around the world.

Obama insists that projecting “soft power” — through economic sanctions and other nonmilitary tools the United States can use to influence world events — is key to defeating terrorism, checking Russian aggression in Ukraine, and getting Iran into stick to the terms of the nuclear deal. On the financial front, Szubin is the man who wields this power.

“Adam understands the complexity of the sanctions world and implications for national security,” said Juan Zarate, deputy national security advisor to President George W. Bush from 2005 to 2009. He praised Szubin’s work in 2011, while working as director of the Treasury Department’s Office of Foreign Assets Control (OFAC), on U.N. military and financial sanctions against Libyan leader Muammar al-Qaddafi. OFAC administers and enforces U.S. economic sanctions and is what Zarate considers “the most powerful yet unknown agency in the U.S. government.”

“He’s been part of this world for a very long time,” added Zarate, now a senior advisor at the Center for Strategic and International Studies.

Obama himself has named-checked Szubin. During a rare July appearance at the Pentagon, the president called on Congress to confirm Szubin as the Treasury’s undersecretary for terrorism and financial crimes. His nomination to replace David Cohen — now deputy director of the CIA — has been on hold since April.

“This is a vital position to our counterterrorism efforts,” Obama said then, adding that cracking down on illicit Islamic State financial streams is key to degrading the extremists’ grasp in Iraq and Syria. “Nobody suggests Mr. Szubin is not qualified. He’s highly qualified.”

Szubin, who has an undergraduate degree from Harvard University and a law degree from Harvard Law School, has worked in the sanctions world for years. During the Bush administration, he served as counsel to the deputy attorney general at the Justice Department and later as senior adviser to the undersecretary for terrorism and financial crimes — the very job he is currently seeking.

In 2006, Szubin, who was then in his early 30s, was appointed by then-Treasury Secretary Henry Paulson to head OFAC. According to one Treasury official who worked with Szubin, the appointment was met with concern.

“When he first got to OFAC as director, he was young. And he looked really young on top of that,” the official said. “There were people who had an immediate skepticism.”

While at the Treasury Department, he has been busy. He has carried out Obama’s strategy to starve terrorists in Somalia, for example, by hammering U.S. financial institutions to ensure that remittances do not fall into the hands of al-Shabab, the militant group linked to al Qaeda.

“Any time you’re talking about funds-transfer mechanisms — whether it’s wires, whether it’s the banking system — any funds transfer can be exploited by bad actors, including terrorist groups,” Szubin told PBS’s NewsHour in a July 18, 2015, interview. “And obviously, when you’re talking about Somalia, al-Shabab has a presence there, and it’s had a very harmful influence on the people of Somalia.”

At the same time, Szubin has helped develop a sanctions regime against Russia and its president, Vladimir Putin, for meddling in eastern Ukraine. “There was a need here for a rapid response — and rapid in a meaningful, not just symbolic, way — to identify key [Russian] cronies and key financial networks,” Szubin was quoted as saying in a 2014 Newsweek article.

The Treasury Department denied FP‘s request to interview Szubin for this article.

There are vocal critics of the carrot-and-stick approach that sanctions provide. Republicans, including most of the field of 2016 GOP hopefuls, want to do more to punish Putin. They point to the fact, inconvenient for Obama’s soft-power argument, that Russia still holds Crimea after annexing it in 2014 and continues to send troops to eastern Ukraine.

Within Congress, there’s also a chorus of critics who don’t think sanctions are enough to stop Putin.

Obama “is afraid of provoking Vladimir Putin,” Sen. John McCain (R-Ariz.) said in June. “Vladimir Putin is on the move because he has paid no price for his aggression.”

“What Putin is trying to do is market the strongman concept,” added Sen. Lindsey Graham (R-S.C.), who is running for president. “He has a brand, and his brand is to be in your face and say, ‘We’re not going to be pushed around by the West.'”

Zarate said he suspects that skepticism about Obama’s sanctions strategy is what is holding up Szubin’s appointment. “It has nothing to do with Adam and his qualifications,” he said.

Szubin is an “excellent diplomat and negotiator,” added Elizabeth Rosenberg, a senior fellow at the Center for a New American Security who has worked with Szubin in the past. “He leads by example, which is really powerful, and sets an important tone for his colleagues and people working for him.”

But being well liked only counts for so much. And as he seeks to win over Israeli officials this weekend in a relentless push for the Iran nuclear accord, Szubin may find his charm offensive isn’t enough for a Jewish state on the defense.

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