1. Soak whole potatoes in ice water in refrigerator 2 hours; drain. Cut potatoes into 1-inch cubes. Steam potatoes, covered, 9 minutes or until just tender. Rinse with cold water; drain and pat dry.
2. Preheat oven to 450°.
3. Combine 1 1/2 tablespoons olive oil and saffron in center of a jelly-roll pan. Bake at 450° for 3 to 4 minutes to bloom saffron. Scrape oil and saffron into a medium bowl using a rubber spatula. Return pan to oven. Add potatoes and 1/2 teaspoon salt to saffron oil, tossing to coat.
4. Spread potatoes on preheated pan; bake at 450° for 45 minutes or until golden brown and crisp, stirring twice.
5. While potatoes cook, heat a small saucepan over medium heat. Add remaining 1 1/2 tablespoons oil to pan; swirl to coat. Add onion; sauté 4 minutes or until tender. Add garlic and bay leaf; sauté 1 minute. Add roasted pepper, tomato puree, paprika, and ground red pepper; bring to a boil over high heat. Reduce heat to low; cover and simmer 20 minutes, stirring occasionally.
6. Remove from heat; discard bay leaf. Place pepper mixture, remaining 1/4 teaspoon salt, and vinegar in a blender. Remove center piece of blender lid (to allow steam to escape); secure blender lid on blender. Place a clean towel over opening in blender lid (to avoid splatters). Blend until smooth. Spoon sauce onto plates or a platter. Top with potatoes, and sprinkle with chives.