Readers of the blog know that a major theme of my writing is a moderate foreign policy requires a certain humility. It requires US and UK policy makers to accept that despite billions of dollars and pounds very few members of Congress or Parliament actually understand the cultures we bomb. Having worked for a successful Iranian- American and known intimately several others I know I do not understand Iran.
But I do know quite a bit about Letters of Intent (LOI) or what is euphemistically called an interim agreement between Iran and the United States, the United Kingdom, and other major powers. In the thousands of deals that crossed my desk in twenty-six years I developed a standard view held widely amongst deal lawyers – letters of intent are a bad idea.
All of the explanations from the Obama administration about confidence measures and interim “halting” of Iranian nuclear development sounds exactly like a merger or acquisition where the two CEOs are having trouble reaching agreement on major issues. Professional negotiators know a much more successful approach is to keep the negotiations secret until a final deal is signed.
And while I admit I do not understand the societies we bomb in the Middle East, an analysis of prior Middle Eastern LOIs is not hard. There are several very relevant examples:
- The Camp David Accords between Egypt and Israel;
- The Oslo Agreements between Israel and the Palestinians; and
- The Gulf War I armistice between Iraq and the victorious Coalition Powers.
President Carter had hoped that the first agreement would change the dynamic in the Middle East. It would serve as a model for other Arab countries to exchange recognition of Israel for territorial and other accommodations between the parties, including the Palestinian plight. Instead, it has frozen Arab/Israeli relations for a generation. The only follow-on agreement was between Israel and Jordan, which was hardly a breakthrough once Jordan became a permanent aid recipient/vassal of the United States.
Oslo bred two violent Palestinian Intifadas featuring suicide bombers and the relentless Israeli conquest of the West Bank. Gulf War I collapsed into a massacre of Iraqi Shiites, an endless “No Fly” zone mission, a persistent totalitarian state with no threat of overthrow, and ultimately a disastrous second war.
In other words LOIs and interim agreements in the Middle East as often as not halt negotiations and freeze the current situation while the underlying tensions fester into war. The 50 year US experience in Korea is yet another example of an interim agreement freezing dangerous conditions on the ground.
In business deals one of the effects of a letter of intent negotiation is it highlights what the parties have not yet agreed across the table. It highlights what is missing, not what has been achieved. That emphasis tends to push the parties to into a negative glass half empty mindset. ”My God, we really did not get anything in this damn LOI.”
When you simply push on past an LOI to the final agreement you are in a perpetual glass half full status. ”Okay, we’ve got that tough issue behind us let’s solve the next one.” The parties are pressured to finish the deal in an environment that reinforces they can. There is no LOI to mask that nothing has yet been accomplished.
We see all these dangers now as the United States maintains that the LOI does not allow Iran to enrich uranium, while Iran maintains that the LOI does allow Iran to continue to construct this basic building block for a bomb. If the goal is the elimination of Iran’s military nuclear program in exchange for Iran’s international trade normalization, the parties have achieved nothing.
I know nothing personally about Iran other than through the eyes of three or four Iranian expatriates, as I suspect the President and Secretary Kerry know very little personally about Iran. But I do know a lot about LOIs. And I have never seen one that was progress towards a deal.