OFAC’s Banality of Evil: Small US Agency Victimizes Millions of Foreign Innocents

By Brian McGlinchey at Stark Realities

As tourists complete their strolls to the White House from the east along Pennsylvania Avenue, they pass a relatively unremarkable, columned office building that overlooks Lafayette Square — oblivious that, behind its walls, bureaucrats are quietly inflicting poverty, illness and death on innumerable innocents around the world.

The Freedman’s Bank Building doesn’t house CIA or Department of Defense officials, but rather the US Treasury’s little-known Office of Foreign Assets Control (OFAC). Instead of orchestrating airstrikes or insurgencies, these bureaucrats impose mass suffering via economic warfare, collectively serving as the tip of the spear that is America’s ever-expanding economic sanctions regime.

The Freedman’s Bank Building: Headquarters of the Treasury Department’s Office of Foreign Assets Control (OFAC)

The term “banality of evil” was coined by intellectual Hannah Arendt after she watched the 1961 trial of Adolf Eichmann, the Nazi official who, from his post atop the inscrutably-named Office IV B 4, oversaw the grim logistics of funneling Jews into German concentration camps.

Arendt said she was struck to find Eichmann “neither perverted nor sadistic,” but “terrifyingly normal.” Rather than a rabid ideologue or psychopathic antisemite, Arendt found herself observing a boring bureaucrat whose diligent performance of his assigned duties was largely motivated by a mere desire for career advancement. “The deeds were monstrous, but the doer – at least the very effective one now on trial – was quite ordinary, commonplace, and neither demonic nor monstrous,” Arendt later wrote.

Arendt’s characterization sparked great controversy. In subsequent decades, some historians have challenged her assessment of Eichmann, and philosophers have wrestled with her proposition that one can do evil without being evil.

Whatever the appropriateness of Arendt’s application of “the banality of evil” to Eichmann, it’s safe to say the individual employees of OFAC — mostly lawyers — similarly aren’t perceived by people around them as malevolent. If you live in the vicinity of the capital, an OFAC worker might be the congenial coach of your child’s soccer team or a friendly face at a volunteer event.

However, regardless of their personalities and sincere convictions that they’re engaged in public service, the stark reality is that many OFAC employees spend their workdays carrying out the mass victimization of people who’ve done no harm to the United States or its citizens. To paraphrase Arendt, these people may be quite ordinary, but their deeds are monstrous.

Considering, just for starters, the direct and indirect effects of the invasion of Iraq, the Pentagon’s Central Command has arguably caused the most 21st-century harm to innocents of any organization in the world. However, staffed with a mere 300 or so bureaucrats, OFAC is surely the leader on a harm-per-employee basis.

Sanctions are often perceived as a welcome alternative to war. In fact, they are merely a different form of war — one that can also produce dead bodies and misery on a grand scale, with the vast majority of the victims having no responsibility for their governments’ supposedly offending actions. (While sanctions are also deployed against terrorists and drug cartels, my focus here is on economic warfare waged against entire countries.)

Demonstrators outside the 2022 Summit of the Americas in Los Angeles (Ringo Chiu/AFP via Getty Images and Jacobin)

The power of American sanctions springs from the US dollar’s domination of international trade and finance. As the Washington Post recently explained:

“To deal in dollars, financial institutions must often borrow, however temporarily, from U.S. counterparts and comply with the rules of the U.S. government. That makes the Treasury Department, which regulates the U.S. financial system, the gatekeeper to the world’s banking operations. And sanctions are the gate.”

Sanctions come in a variety of flavors, including the freezing of assets, barring of financial transactions, and blocking of exports or imports. There are also “secondary sanctions” aimed at non-American parties who dare to conduct business with a sanctions target.

Though they’ve long been part of the American arsenal, sanctions use rose sharply during the 1990s and exploded after 9/11 with the “war on terror” and the accompanying surge in US foreign interventionism and regime-change campaigns. In 2000, there were 912 designated entities; by 2021, there were 9,421.

Via the International Emergency Economic Powers Act of 1977, presidents have broad, unilateral power to impose sanctions to “deal with an unusual and extraordinary threat” to national security. The determination of what constitutes such a threat also rests in the president’s hands, and they unsurprisingly apply an expansive interpretation.

Sanctions can also originate in Congress. Eager to bolster their national security credentials and curry the favor of interest groups like pro-Israel organizations, legislators introduce them with abandon: In the 117th Congress that ended in January 2023, members introduced more than 350 sanctions bills.

“It is way, way overused, and it’s become out of control,” former Senate Foreign Relations Committee staffer Caleb McCarry told the Post, casting OFAC employees as victims. “They are good professionals who have all this political work being shoved on them. They want relief from this relentless, never-ending, you-must-sanction-everybody-and-their-sister, sometimes literally, system.”

Washington’s bipartisan sanctions compulsion surely causes OFAC employees some workplace stress and perhaps a few skipped happy hours. For countless innocents in targeted countries, OFAC-enforced sanctions cause everything from unemployment, ruined career aspirations, financial insecurity and poverty to depression, hunger, disease and death.

Lest you think that harm to civilians via economic warfare is akin to unintended “collateral damage” in conventional warfare, champions of sanctions often make clear that the infliction of misery on civilians is a central aim:

“Denying money and supplies to Cuba [will] bring about hunger, desperation and overthrow of [its] government.” — Deputy Assistant Secretary of State Lestor Mallary in a 1960 memorandum.

“Iraqis will pay the price while [Saddam Hussein] is in power. All possible sanctions will be maintained until he is gone.” — George H.W. Bush’s then-deputy national security advisor Robert Gates.

“[Sanctions] make people suffer. They hurt. They can destroy.” — Former OFAC director of global targeting Robert McBrien, seemingly speaking not with remorse, but awe.

“Critics [have] argued that these measures will hurt the Iranian people. Quite frankly, we need to do just that.” — Rep. Brad Sherman.

When confronted with the harm that economic warfare causes to innocents, sanctions architects point to “humanitarian carveouts” — provisions that grant exceptions for the transfer of certain goods like food and medicine. However, due to sanctions’ blend of complexity, bureaucracy and harsh punishments, even those exceptions often fail to materialize in the real world.

That’s typically because of so-called “de-risking,” a term used to describe financial institutions’ flatly refusing to be party to any business involving a sanctioned country — rather than attempting to parse OFAC rules on a case-by-case business, with the specter of million- or even billion-dollar fines and reputational damage hovering overhead. Of course, even if carveouts worked as advertised, they divert attention from the fact that broad economic warfare inevitably harms innocent people. 

To appreciate the true nature of OFAC’s work, consider a sampling of cruel outcomes visited upon guiltless people in three targeted countries, starting with Iraq.

Among many other types of goods, the US-led, 1990s economic war on Saddam Hussein-led Iraq prevented the country from importing water pumps and chlorine, which were desperately needed to repair and run water treatment plants ruined by American bombs. However, pumps and chlorine were classified by the US government as “dual-use” items that could conceivably be used for sinister purposes — in Iraq’s non-existent weapon of mass destruction program — and were therefore blocked by the sanctions regime.

“The consequences…were visible in pediatric wards,” wrote Andrew Cockburn. “Every year the number of children who died before they reached their first birthday rose, from one in 30 in 1990 to one in eight seven years later. Health specialists agreed that contaminated water was responsible.”

When confronted with an estimate that hundreds of thousands of Iraqi children died from sanction-inflicted malnutrition and degradation of water purification and sanitation systems, then-UN ambassador Madeleine Albright infamously told 60 Minutes’ Lesley Stahl, “We think the price is worth it.”

Under sanctions for 45 years, Iranian innocents have also suffered from OFAC’s work. For example, a 2019 report by Human Rights Watch found that patients with rare diseases struggled to obtain essential, imported medicines, as were patients at a pediatric cancer treatment center.

OFAC’s predation of Iran has also amplified the suffering of people with epidermolysis bullosa, a rare disease that causes blistering of the skin and mucous membranes. Iran’s supply of a special kind of foam dressing evaporated when a European producer ended all business in Iran due to US sanctions. The domestic alternative dressing “often gets attached to the blisters, causing excruciating pain for the patients,” according to an attorney representing a health organization.

An Iranian child who suffers from epidermolysis bullosa; US sanctions have prevented patients like her from using bandages that minimize pain upon removal (Tasnim News Agency)

Meanwhile, though typically measured at the macro level with yardsticks like GDP, general economic damage created by OFAC-enforced sanctions have also caused misery for individual Iranians — from inflation-hammered families compelled to buy rotting food, to young people who can no longer afford to live on their own, to small-business owners driven to bankruptcy.

Syria is another OFAC victim in a region on the receiving end of an outsized share of America’s economic warfare. After ravaging the country with a failed, decade-long regime-change war that boosted al Qaeda affiliates in hopes of toppling Bashar al-Assad’s government, the United States went all-in on sanctions that supposedly seek to oust him via economic strangulation.

The centerpiece is a 2020 law with a profoundly Orwellian name: the Caesar Civilian Protection Act has inflicted widespread harm on Syrian civilians. These sanctions target not only Syria’s central bank and essential industries like oil and gas, they even explicitly aim to bar the reconstruction of areas devastated by the war.

Before that war, Syria’s GDP stood at $68 billion. In 2019 — the year before the Ceasar sanctions were launched — Syria’s GDP had fallen to $22.6 billion. By 2021, it had crumbled to just $9 billion. As Syria’s currency collapsed, prices soared, making it difficult for Syrians to afford food or fuel — particularly Syrians whose jobs have vanished.

Thanks in part to the dispassionate computer keystrokes of OFAC bureaucrats 5,900 miles away, 90% of Syrians are impoverished, and more than half — about 12 million men, women and children — live with food insecurity. In some areas of the country, 28% of children are victims of stunted growth.

With legitimate international commerce thwarted, some Syrians have pivoted to the drug trade, producing a high-margin, synthetic stimulant called Captagon and exporting the pills to other countries across the region, fostering rising levels of addiction. Via that consequence, the 2020 sanction law’s titular “civilian protection” promise falls flat both inside and outside the target country.

Two efficient bureaucrats: German Office IV B 4 Director Adolf Eichmann (left) and US OFAC Director Brad Smith

Given these terrible outcomes, one might expect a compassionate person working in the sanctions realm to treat the topic with a certain sober grimness. However, much as Eichmann exhibited, in the words of Thomas White, a seeming “disengagement from the reality of his evil acts,” former OFAC Director John Smith cheerfully opened a 2022 podcast appearance by declaring he was “very happy to be here talking about my love of economic sanctions.”

Some readers may be inclined to defend OFAC employees on the basis that they don’t set US policy, but merely carry it out. Not coincidentally, that was the core of Eichmann’s defense too. Eichmann was hanged to death. Like many of his agency’s alumni, OFAC director Brad Smith may graduate from imposing mass suffering on behalf of his government to a far more lucrative post in the private sector, advising businesses on navigating the very thicket of thorny regulations he cultivated.

Meanwhile, those who linger at OFAC in roles that sustain broad economic sanctions should confront a damning fact: they’re earning a paycheck by victimizing innocent men, women and children on a massive scale.

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Stark Realities undermines official narratives, demolishes conventional wisdom and exposes fundamental myths across the political spectrum. Read more and subscribe at starkrealities.substack.com  

Views expressed in this article are opinions of the author and do not necessarily reflect the views of ZeroHedge.