Stuart Levey: The man trying to make anti-Iran sanctions work

Stuart Levey (U.S. Treasury Department)

Stuart Levey (U.S. Treasury Department)

WASHINGTON (JTA) — Stuart Levey was given a big stick when the Bush administration made him the first under secretary of the Treasury for terrorism and financial intelligence. But the stick only started to hurt its targets — terrorist groups and rogue nations — when he figured out how to soft-talk nations and private businesses into going along.

Levey is that rarity — a senior government official who has transitioned not just between two administrations, but between two presidents with profound foreign policy differences.

President Obama’s decision to keep Levey and his office in place has less to do with ideology and more with how Levey has made the office into a tool that has effectively squeezed Iran and North Korea and hindered the ambitions of terrorist groups.

Most recently, on June 16, Levey had the floor in the White House press room when he outlined new sanctions targeting an Iranian bank, a number of shipping companies and individuals associated with the Iranian Revolutionary Guard Corps, which is believed to control the Islamic Republic’s suspected nuclear weapons program.

"Stuart has been the chief architect of our strategy to impose growing financial costs on Iran for its continued defiance and he has played a major leadership role on this issue internationally," Obama’s Treasury secretary, Tim Geithner, said in introducing Levey.

The strategy, in fact, predated the Obama administration.

Levey told The New York Times in a 2008 story that he came upon the idea when he was in Bahrain in January 2006, shortly after he assumed his position. Upon reading read in a newspaper that a Swiss bank was pulling out of Iran, it occurred to Levey that the tendency of governments to confine their actions to what they could accomplish directly was overly narrow and that he could do more by talking private enterprise into isolating bad actors.

U.S. laws and executive orders clearly ban U.S. business dealings with Iran, with a few exceptions; getting third parties to comply is more complex and vexed. Levey’s innovation was to transition from law enforcer to diplomat, and to make his case through watertight presentations.

"A lot of it was urging international allies to adopt a more effective international standard," said Rob Nichols, who was an assistant secretary of the Treasury and the communications director when Levey moved to the department in 2005.

By April 2008, Levey was successful enough to have become a bete noire in Tehran.

"They had assigned one of their Zionist deputies to halt the Iranian economy," said Davoud Danesh Jafari, a former finance minister in Iran. "This person would personally travel to many countries around the world. He would use incentives and encouragement to request cooperation against Iran, and if he failed to get any results he would use threats to pursue his goal."

Levey’s Jewishness clearly was significant to Jafari, but though Levey’s children attend a Jewish day school and he is involved in school activities, he does not wear it on his sleeve at work.

Levey tells Jewish friends that he has never personally encountered anti-Jewish hostility on his travels in the Muslim and Arab worlds, and feels equally driven to pursue Iran as he does North Korea or the drug dealers and money launderers he went after at the Department of Justice.

And contrary to Jafari he does not threaten, although Levey’s interlocutors have told the media that they understood the threat of U.S. action underpins his outreach. Instead, Levey would task his staff to come up with unimpeachable evidence of wrongdoing by an entity and then make the case to his interlocutors, often with charts.

"Stuart shared facts," said Molly Millerwise Meiners, his spokeswoman until 2009, who accompanied Levey on his overseas trips and now works as a spokeswoman for Citigroup. "He was very straightforward and worked side by side with these individuals, be they government or private sector."

Jonathan Schanzer, an analyst for Levey in the middle of the decade who is now a vice president at the Foundation for the Defense of Democracy think tank, said Levey was exacting and probing in assessing evidence.

"The system that has been created involves layers of lawyers," Schanzer said.

In making his case for sanctioning shipping companies, Levey at times has attracted headlines with a spectacular find — notably in 2008, when his agency helped linked the owners of a building in New York’s financial district to an Iranian bank with ties to weapons dealers. But Levey generally keeps his victories under wraps, partly because he does not want to exercise a threat option.

"He understands that he cannot make waves in the financial community," Schanzer said. "Slinging around threats would not induce financial stability."

Levey’s single major brush with controversy was his role in accessing the database at SWIFT, the international grouping that coordinates interbank transactions. President George W. Bush authorized such access after the Sept. 11, 2001 attacks, and The New York Times revealed the U.S. Treasury’s use of the access in 2006.

Levey vigorously defended his use of the database, saying it was subject to independent audits for any inappropriate privacy breaches. The Belgium-based grouping objected, but the story — unlike other revelations of Bush-era privacy incursions — slipped out of sight.

Before joining the Bush administration in 2001, Levey was in law practice for 11 years at the Washington firm Miller, Cassidy, Larroca & Lewin, where he worked with Nathan Lewin, well known for his work on behalf of Jewish groups.

Levey,  47, the son of an Akron, Ohio-area dentist, is plugged into Washington’s Republican network. After graduating from Harvard Law School in 1989, he clerked with Laurence Silberman, a conservative judge on the Washington federal appeals court. In private practice, as a white collar criminal defense lawyer, he contributed only to Republicans.

Levey joined the incoming George W. Bush administration at the Department of Justice in 2001, and made enough of a splash as part of the team transferring responsibilities to the then-new Department of Homeland Security that he seemed a natural pick for the new Treasury terrorism financing office when it was established in 2005.

Despite his GOP and conservative credentials, Levey has emerged as nonpartisan to the extent that when Obama’s nomination of Geithner hit a glitch over back taxes, Levey was appointed acting secretary.

“We were absolutely delighted when the Obama administration chose to ask him to stay in office,” said David Harris, executive director of the American Jewish Committee, which honored Levey with the organization’s 2009 Public Service Award. “That really spoke to the reputation Stuart established.”

Levey welcomes submissions from nongovernmental groups, like the Foundation for the Defense of Democracy, that track sanctions busters and terrorist financing. He tells colleagues that people behave better when they know they are being watched.

"He is a very sturdy, organized, rational guy," said Jeff Kupfer, who was deputy chief of staff at the Treasury when Levey transferred and helped select him. "He’s not in it to make a big name for himself.”

Levey’s colleagues cite his ready smile and good-natured approach to his work.

Meiners recalled a 10-course dinner in China in Levey’s honor. The first course was shrimp: Levey declined, saying it was not kosher, but adding that he was sure he would enjoy the other offerings.

The waitstaff swept the shrimp away and brought Levey a heaping plate of broccoli.

"Enough to feed a family of six," Meiners recalled.

Levey dug in — then Meiners spotted a menu and showed it to Levey: All 10 items were not kosher.

The waitstaff insisted it could substitute every item — and did, each time with more broccoli. Levey gamely delved into each plate until he was stuffed — at about the sixth plate.

"He couldn’t look at broccoli for another year," Meiners said.

Notably, Levey in interviews has counted the Chinese as among the most cooperative in his efforts.

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