Rules without enforcement don’t mean much.
That’s the new tone the American Israel Public Affairs Committee and its supporters on Capitol Hill are taking when it comes to Iran sanctions.
In late March, congressional appropriators close to AIPAC moved to introduce enforcement language that would penalize federal agencies that contract with companies doing business with the Islamic Republic.
“If the existing lock on the door was not doing the job, this is a much more powerful lock we’re placing on the door of companies who would want to do business with Iran,” said U.S. Rep. Steve Rothman (D-N.J.), who is pushing the language with fellow U.S. House of Representatives appropriators, Reps. Steve Israel (D-N.Y.) and Mark Kirk (R-Ill.). All three are known for close ties to the Jewish state.
Setting the wheels in motion for the new legislation was the revelation in The New York Times on March 6 that sanctions busters had garnered $107 billion in U.S. government money for procurement business, grants and loans.
In a rare move for a lobby best-known for its behind-the-scenes profile, AIPAC sent letters to every member of Congress expressing its outrage over the sanctions violations.
“These ongoing financial dealings undermine longstanding American efforts to prevent Iran from acquiring a nuclear weapons capability,” the letter said. “While presidents Clinton, Bush and Obama may have discouraged some investment in Iran through their rhetoric, the United States has sent the American and international business community a contradictory message by failing to enforce the law.”
AIPAC’s letter has had an effect.
Rothman said he already was planning action as soon as he read the story, but the calls and e-mails he received made it a must-do. “My BlackBerry was burning,” he said.
Rep. Israel raised the issue with Treasury Secretary Tim Geithner on March 25 in a hearing of the foreign operations subcommittee of the Appropriations Committee. Geithner was receptive.
“We would be open to any effective means for bringing greater pressure to bear on this government,” he said. “We share your commitment to this and we’ll work with you to explore any feasible means to bring greater pressure to bear on this government.”
Rep. Israel later said he was satisfied.
“The administration clearly got the message,” he said, noting that Obama’s predecessor, President George W. Bush, had not enforced the sanctions for both of his terms. “I don’t want to proclaim victory yet; we still have work to do.”
The legislation would attach “limiting” amendments to all 12 budget bills that Congress must pass, preventing funds from going to companies that engage in activity eligible for sanctions or own or control any party that engages in such activity. This latter practice was a common dodge by U.S.-owned companies to enable foreign-owned subsidiaries to deal with Iran.
The legislation came the same week that AIPAC drew nearly 8,000 attendees to its annual policy conference. AIPAC activists lobbied for final passage of bills to enhance sanctions in existence since the mid-1990s. Bills have passed in the House and Senate and are now undergoing reconciliation.
The existing sanctions banned most U.S. business dealings with Iran. Yet, The New York Times found in its March 6 report, 49 U.S. companies were doing business with Iran, and those doing business with Iran’s energy sector had gotten $15 billion.
The existing sanctions restrict access to U.S. markets for foreign entities doing business with Iran’s energy sector. The enhanced sanctions would outright ban U.S. business with any entity doing business with Iran’s energy sector and would also target Iran’s financial sector. The sanctions also would reduce the $20 million ceiling for overseas companies doing such business to $1 million. The idea is to force overseas markets into a choice between trading with the United States or with Iran.
The New York Times revelations were a bitter pill for AIPAC’s activists. The flagrant violation of the 1996 bill that AIPAC had been instrumental in supporting was a damper for AIPAC activists famous for their enthusiasm.
“It’s frustrating, a dead end,” said Debbie Farnoush, 26, from Los Angeles and a founder of the Iranian-American group 30 Years After. “I feel like we’re not going anywhere.” Still, she said, she wasn’t going to give up. The United States needs to be “more aggressive,” she said.
Bruce Wiener, another activist, was optimistic about the prospect of tougher enforcement. “Most members of Congress are sympathetic,” he said. “It’s not a matter of convincing; it’s a matter of implementing.”
Keith Weissman, who headed AIPAC’s Iran desk until 2005, said that Clinton administration officials made it clear to him from the beginning that the bill was never going to be enforced because it crimped U.S. trade with foreign businesses. Clinton’s 1995 executive order banning business with Iran’s energy sector had been enforced for a short period and had spooked the oil industry enough that the 1996 bill was used as leverage — but never in deed.
Part of the problem, Weissman said, was that after years of threatening and not implementing, companies that wanted to deal with Iran realized the U.S. government was crying wolf.
“Once it was clear they weren’t going to enforce it, it wasn’t going to work anymore,” Weissman said.
Weissman and his boss, Steve Rosen, were fired by AIPAC in 2005 under pressure from prosecutors seeking an indictment against the men for relaying national security information to journalists, colleagues and Israeli diplomats. The prosecution dropped the case a year ago after the presiding judge ruled that much of the government’s case violated constitutional principles, including free speech rights.
Weissman, who no longer believes sanctions to be effective, said the amendments now under consideration would create a cumbersome bureaucracy, with multiple U.S. agencies vetting hundreds of businesses.
“What, are you going to vet the company that provides food to soldiers, that helps export oil from Iraq, that caters parties at the Baghdad embassy?” he asked.
Rep. Israel dismisses the idea that the amendments are unworkable.
“There can be no argument that once a law is passed and signed by the president that it’s too complicated to enforce,” he said. “Whether it’s a contract, a grant or a loan, whether it’s a penny, a dime or a dollar, we will not allow them to spend the money.”
Eric Fingerhut and Melissa Apter contributed to this story.
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