Midnight Hour Sanctions Politics

On October 2, majority leader Senator Harry Reid (D-NV) attempted to amend and pass the House version of the "Comprehensive Iran Sanctions, Accountability and Divestment Act of 2008," H.R. 7112. A transcript of the attempt is below and partial video is available on C-Span here.

Senator Wayne Allard objected to the bill, but he was simply the Republican senator on the floor at the time and was objecting on behalf of other Republicans. There has been significant pressure from the American Israel Public Affairs Committee to pass legislation expanding sanctions against Iran before Congress adjourns to campaign for the elections.

In the last few months, Senator Reid has been very reluctant to bring up an Iran sanctions bill on which the members of the Senate, particularly the Democrats, are not united. There were divisions among the Democrats over whether and which Iran sanctions legislation should be voted. Senator Max Baucus (D-MT) introduced his “Iran Sanctions Act of 2008” on July 7, 2008 to thwart a legislative victory for Republican Senator Gordon Smith (R-OR), the original sponsor of the Iran Counter-Proliferation Act of 2007, who is facing a tough re-election race against Democrat Jeff Merkley in Oregon.

However, Senator Baucus’ bill faced opposition because it contained controversial provisions and did not grant jurisdiction to other key Senate committees, namely Foreign Affairs and Banking. Senators Christopher Dodd (D-CT) and Richard Shelby (R-AL) then introduced their "Comprehensive Iran Sanctions, Accountability and Divestment Act of 2008," a version of which was introduced by Representative Howard Berman (D-CA) and passed by the House last Saturday.

Given Senator Reid’s previous reluctance to bring up a sanctions bill on which there has not been party unification, his attempt today was likely meant to alleviate pressure from the American Israel Public Affairs Committee to pass legislation prior to the elections while putting the blame squarely on Republicans. However, the Senate may reconvene the week of November 17, but the House of Representatives is not likely to go back into session. Any bills the Senate debates during the November session will need to have already been passed by the House. There is still then a possibility that the Senate could pass the House version of the "Comprehensive Iran Sanctions, Accountability and Divestment Act of 2008" before the end of the year, but then the Bush administration could also veto it.

Transcript

MR. REID: I ASK UNANIMOUS CONSENT THAT THE SENATE PROCEED TO THE CONSIDERATION OF H.R. 7112, WHICH IS AT THE DESK, THE DODD-SHELBY AMENDMENT, WHICH IS ALSO AT THE DESK BE AGREED TO, THE BILL AS AMENDED BE READ A THIRD TIME, PASSED, THE MOTION TO RECONSIDER BE LAID ON THE TABLE, WITH NO INTERVENING ACTION OR DEBATE, AND ANY STATEMENTS RELATING TO THIS MATTER APPEAR AS PRINTED IN THE RECORD AT THE APPROPRIATE PLACE.

THE PRESIDING OFFICER: IS THERE OBJECTION?

MR. ALLARD: MR. PRESIDENT, I OBJECT. THE BANKING COMMITTEE IS WORKING ON NEW LANGUAGE, AS I UNDERSTAND IT, WHICH IS NOT YET COMPLETED.

MR. REID: MR. PRESIDENT –

THE PRESIDING OFFICER: OBJECTION IS HEARD.

MR. REID: I WANT THE RECORD TO REFLECT THAT THIS VERY IMPORTANT LEGISLATION OPPOSES SANCTIONS WITH RESPECT TO IRAN TO PROVIDE FOR THE DIVERSEMENT OF ASSETS IN IRAN BY STATE AND LOCAL GOVERNMENTS AND IDENTIFY LOCATIONS OF CONCERN WITH RESPECT TO TRANSSHIPMENT, OR DIVERSION OF CERTAIN SENSITIVE ITEMS TO IRAN IS A VERY IMPORTANT. WE'VE TRIED TO GET THIS DONE IN THIS BODY. THERE'S BEEN OBJECTION BY THE REPUBLICANS. THAT'S UNFORTUNATE.

New Senate Sanctions Bill Introduced

On August 1, 2008, Senator Christopher Dodd (D-CT) introduced S. 3445, a “bill to impose sanctions with respect to Iran, to provide for the divestment of assets in Iran by State and local governments and other entities, to identify locations of concern with respect to transshipment, reexportation, or diversion of certain sensitive items to Iran, and for other purposes.” On the same day, S. 3445 was reported to the Senate from the Committee on Banking, Housing and Urban Affairs with written report Number 110-443 and placed on the Senate Legislative Calendar under General Orders, Calendar No. 939. According to the Summary on THOMAS, Senator Dodd is currently the only co-sponsor of the legislation, even though it was announced on July 15, 2008 that Senator Richard Shelby (R-AL) would join Senator Dodd in introducing the legislation.

Title I of the legislation would prohibit the importation, directly or indirectly, of all Iranian products into the U.S., with the exception of information and informational materials. It would also prohibit the export of all American products, directly or indirectly, to Iran, with the exception of agricultural commodities; medicine; information and informational materials; articles to provide humanitarian assistance; and goods, services or technologies necessary for the safe operation of commercial passenger aircraft manufactured in the U.S. In addition, the bill would freeze the assets of people that have engaged in activities such as terrorism or weapons proliferation. It also extends the assets freeze to assets that sanctioned persons transfer to family members or associates. S. 3445 would also prohibit U.S. and foreign companies that meet sanctions criteria from entering into procurement contracts with the federal government. All of these provisions are subject to a waiver, however, if deemed by the President to be in the national interest.

S. 3445 would also hold parent companies liable for violations of sanctions by foreign subsidiaries, though the President may waive the sanctions if it is in the national interest and if he submits a report describing the reasons for such a determination to appropriate Congressional committees. S. 3445 would also require the President, within 180 days of enactment of the bill and every 180 days thereafter, to report to the appropriate Congressional Committees on eligible foreign investments made in Iran's energy sector since January 1, 2008 and the determination of the President on whether such investments qualify as sanctionable offenses.

Section 107 of the bill expresses the Sense of Congress that the President immediately impose sanctions on the Central Bank of Iran and any other Iranian bank engaged in proliferation activities or support of terrorist groups.

Title II of S. 3445 also enable States, local governments and institutions of higher education to divest public assets from certain companies doing business in Iran. The bill requires any of these entities to provide notice to the Department of Justice when they enact an Iran-related divestment law. It also requires these entities to inform companies before divestment and give the companies at least 90 days to comment on the decision. Section 203 of Title II provides a “safe harbor” for Asset Managers for divestment decisions made in accordance with the bill.

Title III of S. 3445 requires the Director of National Intelligence to identify countries where sensitive U.S. technology is being illegally transshipped to Iran via other countries, and to report annually to the Secretaries of Commerce, State and the Treasury, as well as to Congress. Section 303 would require the Administration to initiate contact with countries of “possible diversion concern” and offer incentives to them to strengthen their export control regimes, improve information sharing and support legitimate trade in high-technology goods. According to the bill “If countries fail to cooperate with such initiatives, then, under subsection (b), the Administration would be required to designate a country as a ‘Destination of Diversion Concern.’ … Exports to a country designated as a `Destination of Diversion Concern' would be subject to additional licensure requirements; more stringent license review, which could result in fewer approvals or more conditions on licenses; delayed authorizations due to increased end-user checks; and finally, a decrease in authorizations due to diversion risks for such countries.” Section 304 would require the Director of National Intelligence to report to Congress on whether or not to extend the “Destination of Diversion Concern” system to countries other than Iran.

The Congressional Budget Office estimates that implementing the bill would cost $121 million in 2009 and $496 million over the 2009-2013. In addition, CBO estimates that enacting the bill would reduce revenues by about $6 million over the 2009-2018 period. The costs of S. 3445 fall within budget functions 150 (international affairs), 370 (commerce and housing credit), and 800 (general government).

The bill would impose private-sector mandates by prohibiting imports from and exports to Iran, as well as by freezing assets of certain individuals. it could also impose a mandate on exporters by specifying additional license requirements on exports to certain countries that are designated “Destinations of Possible Diversion Concern.” According to the CBO, the cost of complying with the mandates in the bill are uncertain and it cannot determine whether the aggregate cost of complying with the mandates would exceed the annual threshold for private-sector mandates established by the Unfunded Mandates Reform Act (UMRA) ($136 million in 2008, adjusted annually for inflation).

Senate Armed Services Committee Holds Closed Hearing on Iran

On July 24, 2008, the Senate Committee on Armed Services held a closed session "to receive a briefing on Iran from Dolores A. Powers, Deputy Iran Mission Manager, Alan R. Pino, National Intelligence Officer for the Near East, and William J. Keller, Deputy National Intelligence Officer for Weapons of Mass Destruction, all of the Office of the Director of National Intelligence; Jeffrey D. Feltman, Principal Deputy Assistant Secretary of State for the Bureau of Near Eastern Affairs; and James R. Clapper, Jr., Under Secretary for Intelligence, Michael G. Vickers, Assistant Secretary for Special Operations/Low-Intensity Conflict and Interdependent Capabilities, and Lieutenant General Carter F. Ham, USA, Director, J-3 Operations Directorate, Joint Chiefs of Staff, all of the Department of Defense."

Senators Endorse U.S. Interests Section in Tehran

Senators Dick Durbin (D-IL), John Kerry (D-MA), Carl Levin (D-MI), Patrick Leahy (D-VT), Russ Feingold (D-WI), Dianne Feinstein (D-CA) and Patty Murray (D-WA) sent a letter to President Bush on July 24, 2008 endorsing the opening of an interests section in Tehran. Below is the full text of the letter.

Dear Mr. President:

We are encouraged by recent revelations that your Administration is actively reviewing the possibility of opening an interests section in Iran, and write to express our support for this limited but strategically significant U.S. diplomatic presence. By establishing direct contact with the people of Iran, facilitating their travel to America, and increasing our understanding of Iran's complicated domestic politics, this initiative will advance our national interests.

Along with your welcome decision to send Under Secretary of State William Burns to Geneva to join in talks with Iran over its nuclear program, this will send a positive message to the Iranian people and the international community about our intentions and enhance our ability to apply greater pressure on the Iranian government.

As you know, Iranians are among the most pro-American people in the Greater Middle East. Many hold the United States in high regard as a country that cherishes the values of freedom, tolerance, and human dignity. Despite our strong differences with their government over its nuclear ambitions, support for international terrorism, and hateful rhetoric towards Israel, Secretary of State Condoleezza Rice recently said that "[w]e are determined to find ways to reach out to the Iranian people." Opening an interests section in Iran, as we have done in other countries such as Cuba, is a highly-visible way of accomplishing this important objective.

The United States has not had any diplomatic presence in Iran since the hostage crisis in 1979. As a result, Iranians who are interested in traveling to the United States must go to Dubai to obtain U.S. visas, impeding familial, cultural, and scientific exchanges that over time can begin to transform Iran. The more frequently that ordinary Iranians have an opportunity to interact with Americans, the more likely they are to ignore their government's propaganda demonizing our country.

At the same time, a limited diplomatic presence in Iran would improve our understanding of the competing political factions that influence Tehran's decision-making. As Under Secretary Burns recently acknowledged, our knowledge of Iran's political and policy-making processes is currently rather limited. Iran already operates an active interests section in Washington, DC, ostensibly for these types of reasons, so our own diplomats are at a relative information disadvantage.

While we recognize that this initiative alone will not resolve our profound disagreements with Iran's leaders, we believe it is a step in the right direction with the Iranian people. If it comes to pass, we look forward to working with your Administration to provide any necessary congressional support.

Thank you for your consideration. We look forward to your reply.

Iran Provisions in Senate Foreign Operations Appropriations

Yesterday, I posted the language in the Senate Appropriations Committee report on the Fiscal Year 2009 Department of State, Foreign Operations and Related Programs Appropriations bill. As with most appropriations bills this year, it is not likely that the Foreign Operations Appropriations will be considered by the full House or Senate.

Below is the full text of the Iran-related sections in the S. 3288 the FY'09 Foreign Ops Appropriations bill.

Transparency in Broadcasting (page 26-27)
SEC. 114. Funds appropriated under the heading ‘‘International Broadcasting Operations’’ in this Act for programs and activities supporting international broadcasting to the Middle East and Iran in fiscal year 2009 may be made available if the United States Department of State and the Broadcasting Board of Governors Inspector General reports to the Committees on Appropriations that such broadcasting meets the standards in the Office of Inspector General report ISP–IB–08–45, May 2008.

Democracy Fund (page 44)
(e) Of the funds appropriated under this heading, up to $20,000,000 shall be made available for programs to promote democracy in Iran and to counter the political influence of the Government of Iran in Lebanon and the West Bank and Gaza: Provided, That none of such funds may be used for educational and cultural exchanges.

Prohibition Against Direct Funding for Certain Countries (page 77-78)
SEC. 706. None of the funds appropriated or otherwise made available pursuant to this Act shall be obligated or expended to finance directly any assistance or reparations to Cuba, North Korea, Iran, or Syria, unless the President determines that assistance to such countries is important to the national interest of the United States and notifies the Committees on Appropriations in accordance with the regular notification procedures: Provided,That for purposes of this section, the prohibition on obligations or expenditures shall include direct loans, credits, insurance and guarantees of the Export-Import Bank or its agents.

Special Notification Requirements (page 96)
SEC. 719. None of the funds appropriated under titles II through VI of this Act shall be obligated or expended for assistance for Serbia, Sudan, Zimbabwe, Cuba, Iran, Haiti, Libya, Ethiopia, Mexico, or Cambodia except as provided through the regular notification procedures of the Committees on Appropriations.

Iran in the Senate Foreign Operations Appropriations Bill

Last week, the Senate and House Appropriations Committees completed mark-up of the Fiscal Year 2009 Department of State, Foreign Operations and Related Programs Appropriations. However, as with most appropriations bills this year, it is not likely that the Foreign Operations Appropriations will be considered by the full House or Senate.

Today, the Senate Committee on Appropriations released a report of the mark-up of S.3288, the fiscal year 2009 appropriations bill for the Department of State, Foreign Operations and Related Programs introduced by Senator Patrick Leahy (D-VT) on July 18, 2008. The Senate version of the bill contains $20,000,000 for democracy programs in Iran and “prohibits the use of funds under this heading for educational and cultural exchanges.” The bill also contains a provision regarding monitoring and reporting on broadcasts to the Middle East and Iran.

Below is the full text of the Iran-related provisions in the Senate report of the FY’09 Foreign Operations Appropriations bill.

(Page 51) Iran.—The Committee recommends $20,000,000 for democracy programs for Iran, and prohibits the use of funds under this heading for educational and cultural exchanges.

(Page 27) Transparency in Broadcasting.—The Committee remains concerned with the integrity of U.S. broadcasting overseas and includes a provision to ensure that the Inspector General of the Department of State and BBG continues to monitor and report on the content of broadcasts to the Middle East and Iran. BBG programs are intended to reach countries where fair and unbiased local media is limited and therefore broadcasting a variety of views are required. The Inspector General’s report (ISP–IB–08–45, May 2008) noted several ways to strengthen the transparency and accountability of broadcasts, such as adherence to a journalistic code of ethics, rigorous training programs and internal monitoring. The Committee reiterates its strong support for free and fair broadcasting, and in particular the importance of providing many points of view to maintain balanced reporting.

The Committee notes that the U.S. International Broadcasting Act of 1994, as amended, lays out strict standards and principles for U.S. international broadcasting that define its journalistic mission and responsibilities. The Committee directs the members of the BBG to rigorously oversee all broadcasting programs funded under this heading to ensure they are within authorized mandates and that limited resources are used effectively. The BBG is directed, in conjunction with the MBN, VOA, and RFE/RL, to make public English transcripts on a case by case basis if requested by the Committee. The Inspector General for the Department of State and BBG should, through its normal oversight of BBG activities, inspect random translations.

Senators Dodd and Shelby Introduce New Sanctions Legislation

Today, Senators Chris Dodd (D-CT) and Richard Shelby (R-AL), Chairman and Ranking Member of the Senate Committee on Banking, Housing, and Urban Affairs, announced a new piece of legislation entitled the “Comprehensive Iran Sanctions, Accountability and Divestment Act of 2008” that will expand U.S. sanctions on Iran. The Banking Committee will consider the legislation on Thursday, July 17 at 10 am in 538 Dirksen Senate Office Building.

According to a joint announcement, Senator Dodd said, “Iran’s missile tests last week underscore its serious threat to our allies and interests in the region. This bipartisan bill strengthens economic sanctions against Iran, and authorizes divestment from companies that do business with Iran’s key oil sector to increase pressure on its government to meet the demands of the international community. It also helps to prevent the illegal diversion of sensitive U.S. technologies to Iran. This legislation is a critical component to efforts to advance peace and stability to this vital region.”

“I am pleased to join Chairman Dodd in supporting this important legislation,” said Senator Shelby. “Iran is a growing and serious threat, and it is imperative that the United States avail itself of every possible measure to ensure that Iran changes its behavior in a manner that promotes peace and stability. This legislation is a step in that direction, and I look forward to helping Chairman Dodd advance it.”

I will post additional analysis on the legislation very soon.

Senate Finance Committee Approves 'Iran Sanctions Act of 2008'

On June 18, the Senate Finance Committee held a hearing to mark up an original bill, the “Iran Sanctions Act of 2008.” Despite opposition to provisions in the bill from members of the Committee and the Bush administration, the committee overwhelming approved the bill 19-2.

On June 17, Secretary of State Condoleezza Rice wrote Senate Finance Committee Chairman Max Baucus (D-MT) urging two provisions in the legislation be dropped – the requirement to list and impose sanctions against U.S. parent companies with independent foreign subsidiaries that do business with Iran; and the provision barring entry into force of the civil nuclear cooperation agreement (123 agreement) between the U.S. and Russia.

Senator Jeff Bingaman (D-NM) led an effort to strip out the language blocking the Russia agreement, but it failed 4-15. The other Senators who voted in favor of the Bingaman effort were John D. Rockefeller IV (D-WV), Blanche Lincoln (D-AR) and Maria Cantwell (D-WA).

The Finance Committee passed an amendment by voice vote introduced by Senator Jim Bunning (R-KY) to impose a 180-day limit on investigations into whether companies are doing business with Iran. According to Senator Bunning, the administration’s reluctance to sanction companies has led to interminable investigations with no conclusion.

Lobbyists for European countries were out in full force on Capitol Hill lobbying against the bill.

The Senate Banking and Foreign Relations Committees are also claiming jurisdiction over the bill. Senate Foreign Relations Committee Chairman Joseph Biden (D-DE) and Ranking Member Richard Lugar (R-IN) both oppose the provision barring entry into force of the civil nuclear cooperation agreement. Senate Banking Committee Chair Christopher Dodd (D-CT) said he expects to mark up the bill in his committee next week.

By Senate practices, a bill is referred to multiple committees by Unanimous Consent. However, the Senate may use provisions of Senate Rule XIV or certain unanimous consent requests to completely or partially bypass potential consideration of a bill or joint resolution by a Senate committee. There is an effort underway to attach the “Iran Sanctions Act” to the Defense Authorization bill, but this, and bypassing the other committees claiming jurisdiction over the bill are not viewed favorably.

New Sanctions Bill to be Marked up in Finance Committee

On June 16, Senator Max Baucus (D-MT) introduced a new sanctions bill entitled the “Iran Sanctions Act of 2008” and it is scheduled to be marked up in the Senate Finance Committee on June 18, 2008. The bill is based on S.970, introduced by Senator Gordon Smith (R-OR). The bill is not yet accessible in Thomas, but a summary is posted on the Senate Finance Committee website.

As stated in a National Journal article, the new bill preserves the core of the measures in S.970, including a ban on “direct or indirect trade of most products between the United States and Iran;” prohibiting “the extension of trade preferences to Iran or that country's accession to the World Trade Organization;” freezing “assets of certain Iranian diplomats and representatives deemed to be involved in nuclear proliferation;” and subjecting “U.S. parent companies to sanctions if they knowingly participate in violations of sanctions law by a foreign subsidiary.”

The biggest difference between the new bill and S.970 is the inclusion of presidential waivers for nearly all of the provisions in the bill, “if the President determines that such a waiver is in the national interest of the United States.” The new bill does not appear to contain a requirement that the Director of National Intelligence submit to Congress an updated, comprehensive National Intelligence Estimate on Iran. It also does not contain the provision in Section 9 of S.970 that would have eliminated certain tax incentives for oil companies investing in Iran.

The new bill tightens an export ban “so that only agricultural commodities, medicine and medical devices, humanitarian assistance provided to relieve human suffering, and information materials are specifically excepted. The proposal defines agricultural commodities as any agricultural commodity, food, feed, fiber, or livestock.” According to the description of the bill, “The proposal also codifies the direct and indirect import ban on Iranian goods destined for the United States. The proposal does not provide any specific exceptions for the import ban. Under the proposal, the President may waive the export and import prohibitions if he determines that such a waiver is in the national interest of the United States.”

The bill removed a provision in S.970 that would have penalized trade preferences or World Trade Organization (WTO) accession for third countries determined to be aiding Iran's nuclear program. However, the bill still “prohibits the United States Trade Representative or any other Federal official from taking action that would extend trade preferences or lead to the WTO accession of Iran,” but “the President may waive this prohibition if he determines that such a waiver would be in the national interest of the United States.”

The bill would require the President to freeze the funds and assets under U.S. jurisdiction of Iranian diplomats and representatives of other government and military or quasi-governmental institutions of Iran if such persons are subject to sanctions under the International Emergency Economic Powers Act, but “the President may waive this requirement if he determines that such a waiver would be in the national interest of the United States.”

The bill would subject U.S. parent companies to sanctions if the parent company knowingly participates in violations of U.S. sanctions laws by its foreign subsidiaries, but “the President may waive this requirement if he determines that such a waiver would be in the national interest of the United States.”

The bill would prohibit the U.S. from entering into a 123 Agreement with Russia and provides that the U.S. “may not issue licenses for the export of any nuclear material, facilities, components, or other goods, services, or technology that fall within the scope of the 123 Agreement.” It further states that the U.S. “may not approve the direct or indirect transfer or retransfer to Russia of any nuclear material, facilities, components, or other goods, services, or technology that fall within the scope of the 123 Agreement.” Under the bill, these prohibitions would remain in place “unless the President certifies to Congress that (1) Russia has suspended all nuclear assistance to Iran and all transfers of conventional weapons and missiles to Iran; or (2) Iran has completely, verifiably, and irreversibly dismantled all nuclear enrichment-related and reprocessing-related programs.” Given this impossible certification, it is likely that several key senators will become motivated to either remove the provision or oppose the bill.

The new bill also expresses the sense of Congress that the United States should support the creation of an international nuclear fuel bank by the International Atomic Energy Agency and “that the President should ensure that the fuel bank has multilateral support, is under IAEA control, and has necessary safeguards in place prior to making a contribution on behalf of the United States.”

The bill maintains the provision in S.970 that the United States must cut its contributions to the World Bank by an amount that is proportional to the total amount of loans the World Bank provided to Iran after 2008. Like S.970, it also authorizes the money made available as a result of the United States’ reduction in contributions to the World Bank to be appropriated to the U.S. Agency for International Development for its Child Survival and Health Programs.” However, this section also now includes a presidential waiver if determined to be in the national interest in the United States.

The section on “Exchange Programs with the People of Iran” has been changed from S.970. The new bill would authorize the President to carry out exchange programs with the people of Iran, with a focus on exchange programs with Iranian youth and it authorizes $15,000,000 to carry out these exchange programs for fiscal year 2009. S.970 would have authorized $10,000,000 for this program. Like S. 970, the new bill states that the Broadcasting Board of Governors should devote a greater proportion of Radio Farda’s programming to news and analysis.

The bill would increase the amount of money to be appropriated to the Department of Treasury’s Office of Terrorism and Financial Intelligence (TFI), of which the Office of Foreign Asset Controls is part, to $61,712,000 for Fiscal Year 2009. It would also increase the Department of Treasury’s Financial Crimes Enforcement Center (FinCEN) to $91,335,000 for Fiscal Year 2009.

The reporting requirements that were in S.970 have been changed and now include a requirement to report “to the Senate Finance, Banking, and Foreign Relations Committees and House Ways and Means, Financial Services, and Foreign Affairs Committees 180 days after enactment of this Act, and every 180 days thereafter, any foreign investments made in Iran’s energy sector since January 1, 2008 and the determination of the President on whether such investments qualify as sanctionable offenses under the” Iran Sanctions Act. This reporting requirement was added because the President has never imposed sanctions on foreign companies that have invested more than $20,000,000 a year in Iran’s petroleum and natural gas sectors.

The bill would require “Secretary of Treasury to report to the Senate Finance, Banking, and Foreign Relations Committees and House Ways and Means, Financial Services, and Foreign Affairs Committees not later than 90 days after the date of enactment of this Act, and every 90 days thereafter, on export credits issued by foreign banks to persons investing in Iran’s energy sector, and any fines, restrictions, or other actions taken by the President to discourage such export credit guarantees.” Currently there is no requirement for such a report.

The bill would require the President to provide Congress with a report not later than 180 days after enactment of the bill, and annually thereafter, on the names of persons that have or conduct business in the United States and also invest in Iran. The report will also be required to include the amount of each investment in Iran. Currently, there is no requirement for such a report.

Like S.970, the bill maintains a “Sense of Congress” that “the Executive Director of the Thrift Savings Board should report to the Senate Finance, Banking, and Foreign Relations Committees and House of Representatives Ways and Means, Financial Services, and Foreign Affairs Committees any investments from the Thrift Savings Plan that are in entities that invest in Iran.”

The bill adds a termination clause “if the President determines and certifies to the Senate Finance, Banking, and Foreign Relations Committees and House of Representatives Ways and Means, Financial Services, and Foreign Affairs Committees that Iran has completely, verifiably, and irreversibly dismantled all nuclear enrichment and reprocessing-related programs.” It also adds a sunset provision in that it will “cease to have force and effect five years after the date of enactment.”

It is unclear whether the new bill will be subject to the jurisdiction of other Senate committees, particularly the Banking and the Foreign Relations Committees.

This Just in...

The Senate Finance Committee will mark up S. 970, the Iran Counterproliferation Act on June 18th.

Senate Introduces New Campion Sanctions Resolution

On June 2, 2008, Senator Evan Bayh (D-IN) introduced S.Res.580 along with Sentors John Thune (R-SD), and Gordon Smith (R-OR). The bill text is not yet available on Thomas, but the resolution appears to be the Senate version of H.Con.Res. 362 introduced by Gary Ackerman and Mike Pence into the House of Representatives on May 22. The introduction of both bills calling for more U.S. unilateral sanctions not surprisingly comes as AIPAC is holding its annual policy conference in Washington, D.C.

S.Res.580 resolves that the Senate—

(1) declares that preventing the Government of Iran from acquiring a nuclear weapons capability, through all appropriate economic, political, and diplomatic means, is a matter of the highest importance to the national security of the United States and must be dealt with urgently;

(2) urges the President, in the strongest of terms, to immediately use the President's existing authority to impose sanctions on--

(A) the Central Bank of Iran and any other Iranian bank engaged in proliferation activities or support of terrorist groups;
(B) international banks that continue to conduct financial transactions with sanctioned Iranian banks;
(C) energy companies that have invested $20,000,000 or more in the petroleum or national gas sector of the economy of Iran in any given year since the date of the enactment of the Iran Sanctions Act of 1996 (Public Law 104-172; 50 U.S.C. 1701 note); and
(D) companies that continue to do business with the Islamic Revolutionary Guard Corps of Iran;

(3) demands that the President lead an international effort to immediately and dramatically increase the pressure on the Government of Iran to verifiably suspend its nuclear enrichment activities by, among other measures, banning the importation of refined petroleum products to Iran; and

(4) asserts that nothing in this resolution shall be construed to authorize the use of force against Iran.

Senate hearing: Addressing Iran’s Nuclear Ambitions

On Thursday, April 24, the U.S. Senate Committee on Homeland Security and Governmental Affairs Subcommittee on Federal Financial Management, Government Information, Federal Services, and International Security will hold a hearing on "Addressing Iran's Nuclear Ambitions." Witnesses incude:

Panel I

• Mr. Jeffrey Feltman, Principal Deputy Assistant Secretary for NearEastern Affairs, U.S. Department of State
• Ms. Patricia McNerney, Principal Deputy Assistant Secretary forInternational Security and Nonproliferation , U.S. Department of State

Panel II

• Graham Allison, Director of the Belfer Center for Science andInternational Affairs and Douglas Dillon Professor of Government,Harvard University's John F. Kennedy School of Government; Former Special Advisor to Secretary of Defense and Former Assistant Secretaryof Defense for Policy and Plans, U.S. Department of Defense
• Ambassador Dennis Ross, Counselor and Ziegler Distinguished Fellow,Washington Institute for Near East Policy; Former Director of U.S. State Department's Office of Policy Planning, U.S. Department of State
• Dr. Jim Walsh, Research Associate, Massachusetts Institute ofTechnology; Former Executive Director of the Managing the Atom Projectat the Belfer Center for Science and International Affairs at HarvardUniversity's John F. Kennedy School of Government
• Mr. Stephen Rademaker, Senior Counsel, Barbour Griffith and Rogers,LLC; Former Assistant Secretary, Bureau of International Security andNonproliferation, U.S. Department of State

Note: I am also posting Iran-related hearings and events on the Campaign for a New American Policy on Iran calendar. More details on this hearing and other events can be found there.

Sanctions Bill Rears Its Ugly Head

On Tuesday, April 8, the Senate Finance Committee is expected to hold a hearing on the Iran Counter-Proliferation Act, S. 970, introduced by Senator Gordon Smith (R-OR). The legislation currently has 70 co-sponsors.

I have been told that Section 10 in S. 970 on World Bank Loans to Iran has been deleted. As a result, there are now jurisdictional issues being worked out between the Senate Banking Committee and the Senate Finance Committee and the bill will now also be referred to the Banking Committee. Section 10 would have required reports on the number of loans provided by the World Bank to Iran; the dollar amount of such loans; and the voting record of each member of the World Bank on such loans. It would have also reduced the U.S. contribution to the World Bank for fiscal year 2008 by the same ratio of the total of the amounts provided in the preceding year by the World Bank to entities in Iran to the total of the amounts provided by the Bank to all entities, and for all projects and activities.

One of the biggest shortcomings in U.S. policy towards Iran is that the so-called “diplomatic option” has been defined as sanctions. But, sanctions are punitive measures, not diplomacy. There has been no real diplomacy with Iran and the U.S. has maintained preconditions for negotiations. I am baffled as why there is such a stigma for diplomacy with Iran. Diplomacy is not capitulation to an enemy; it is a strategic and vitally important component of international relations and foreign policy. Let’s not forget that President Reagan negotiated with the “Evil Empire.” And, it has become acceptable under this administration to engage in diplomacy with North Korea, another member of the “axis of evil.”

Unilateral sanctions against Iran are likely to fail. They will continue to push Iran into a corner, where it will be less likely to negotiate and more likely to act out against the U.S. In the past, groups that have favored confrontation between Iran and US have closed small windows of opportunity for diplomacy by pushing to sanction Iran. Unilateral sanctions not only undermine diplomacy with Iran, they also significantly increase the risk of conflict, particularly since there is an absence of U.S. diplomacy with Iran.

In addition to the consequences of attempting to coerce Iran through sanctions mentioned above, another key issue with S. 970 is that it will further undermine U.S. relations with Russia, which is specifically targeted under Section 6 of the bill.

Section 6 of S. 970 essentially threatens Russia to end nuclear and missile cooperation with Iran or the U.S. will not enter into any 123 Agreement for nuclear cooperation with Russia. This has actually been the long-standing policy of both the Clinton and Bush administrations in trying to gain leverage on Russia regarding the issue of Iran. A Section 123 Agreement is the necessary agreement for the U.S. to enter into nuclear cooperation with another country, as stipulated originally in the US Atomic Energy Act. It provides and outlines the “terms, conditions, duration, nature, scope, and other requirements of proposed agreements for cooperation; Presidential exemptions; negotiations; Nuclear Proliferation Assessment Statement.”

In July, 2006, Presidents Bush and Putin announced they were open to negotiations on an agreement that would permit full nuclear cooperation between the two countries. Russia has long sought a 123 Agreement with the U.S. Nonproliferation experts have noted that a 123 Agreement between the U.S. and Russia could yield important nonproliferation benefits such as providing the international community with greater access to Russia’s civil nuclear facilities. A 123 Agreement could also lead to increased efforts to secure and dismantle Soviet-era nuclear weapons.

Additionally, Russia is also an important partner for any diplomatic efforts with Iran. The U.S. needs Russia’s support to maintain and increase international pressure on Iran, which is more meaningful and will have better results than U.S. unilateral sanctions and coercion. If in fact this section of S. 970 becomes law, Russia could feel threatened and would not have any incentive to be a party to diplomatic efforts to end the political standoff over Iran’s nuclear program.

The fact that Russia is cooperating with Iran on the Bushehr reactor is not the heart of the matter and targeting Russia for this cooperation in S. 970 only deters focus from the real issues surrounding the political standoff over Iran’s nuclear program. While the U.S. initially opposed Russian participation in building the Bushehr reactor and supplying it with fuel, the Bush administration changed its position last year in order to get Russian support for United Nations sanctions on Iran. The reversal in the U.S. position on the Bushehr reactor also followed Iran’s agreement to return spent nuclear fuel from the reactor back to Russia to ensure it doesn't extract plutonium to make nuclear weapons. The Bush administration has since been pointing to the Bushehr program to support arguments that Iran does not need a uranium enrichment program.

Instead of pushing forward with legislation that will only undermine prospects for a real solution to U.S.-Iran relations, the Senate should employ a more far-sighted, responsible approach that includes sustained, direct, unconditional and comprehensive talks with Iran, and include in such an approach engaging, rather than isolating, strategic allies and partners.

Durbin Introduces Iran Resolution

Yesterday, I posted about Sen. Dick Durbin (D-IL) making a speech during the debate on the AMTRAK bill about his concern with the administration's assertions on Iran. In the end, Senator Durbin did not offer his new resolution as an amendment, but he, along with Senator Bernie Sanders (D-VT), did introduce it as a stand alone bill, S. Res. 356. The bill has been referred to the Committee on Foreign Relations, but the Senators will look for other opportunities to introduce it.

From the October 25, 2007 Congressional Record:
SENATE RESOLUTION 356--AFFIRMING THAT ANY OFFENSIVE MILITARY ACTION TAKEN AGAINST IRAN MUST BE EXPLICITLY APPROVED BY CONGRESS BEFORE SUCH ACTION MAY BE INITIATED

Mr. DURBIN (for himself and Mr. SANDERS) submitted the following resolution; which was referred to the Committee on Foreign Relations:

S. RES. 356

Whereas Article I, Section 8, of the Constitution of the United States vests in Congress all power to declare war: Now, therefore, be it

Resolved, That any offensive military action taken by the United States against Iran must be explicitly approved by Congress before such action may be initiated.

Senator Durbin Introduces Iran Amendment to AMTRAK bill

What do Iran and AMTRAK have in common? Well, nothing until today. Senator Dick Durbin (D-IL) went to floor during the debate of the AMTRAK bill and said he was upset about the administration's assertions regarding Iran. He said he wanted to be clear that Congress has not in any way authorized the use of military force against Iran. Durbin then offered a nonbinding Resolution "Affirming that any offensive military action taken against Iran must be explicitly approved by Congress before such action may be initiated." He assumed it wouldn't be allowed to be voted on the AMTRAK bill, so his intention is to offer as a seperate resolution. I'll post more information when it is available in the Congressional Record tomorrow.

Update: A colleague just emailed me a very clever response to this. He said: "Quite appropriate as Iran is a train wreck waiting to happen, just like AMTRAK." I couldn't agree more.

Senator Byrd Introduces "Iran" Amendments to the Defense Appropriations Bill

Senator Robert Byrd (D-WV) introduced Amendment No. 3123 and No. 3133 to the Fiscal Year 2008 Defense Appropriations bill. The amendments would prohibit funding provided by the bill to be used for military operations or activities against any other country without explicit Congressional authorization. The text of both amendments is identical and I'm unsure why two identical amendments were submitted. The amendments do provide exceptions for certain activities. Though the amendments employ a non-country-specific approach similar to Senator Byrd's S. Res. 39, the enactment of either amendment could prevent a military confrontation with Iran. Below is the text of Amendments 3123 and 3133.

Sec. 8107. (a) None of the amounts appropriated or otherwise made available by this Act may be obligated or expended for military operations or activities against any other country without the enactment of an Act or the passage of a resolution passed by the Senate and the House of Representatives specifically authorizing such obligation or expenditure.

(b) The prohibition in subsection (a) shall not apply with respect to the following military operations or activities:

(1) Military operations or activities to directly repel an attack against the territory or the Armed Forces of the United States.

(2) Military operations or activities in hot pursuit of hostile forces who are directly engaged in combat operations against the Armed Forces of the United States.

(3) Intelligence collection activities of which Congress has been appropriately notified under applicable law.

(c) Not later than 48 hours after determining to obligate or expend amounts otherwise prohibited from obligation or expenditure under subsection (a) for purposes of a military operation or activity described in subsection (b), the President shall submit to the Committee on Armed Forces and the Committee on Appropriations of the Senate and the Committee on Armed Forces and the Committee on Appropriations of the House of Representatives a report on such determination, including a justification for the determination.

(d) Nothing in this section shall be construed as limiting the authority of the President under Article II, Section 2, of the Constitution of the United States.

Modified Kyl-Lieberman Amendment

Here is the modified Kyl-Lieberman Amendment, revised on September 26, 2007 and passed by the Senate.

The new version of the bill contains two quotes on diplomatic measures with Iran, further softening the language of the bill.

Insert prior to section (6) the following:

(16) Ambassador Crocker further testified before Congress on September 11, 2007, with respect to talks with Iran, that "I think that it's an option that we want to preserve. Our first couple of rounds did not produce anything. I don't think that we should either, therefore, be in a big hurry to have another round, nor do I think we should say we're not going to talk anymore . . . I do believe it's important to keep the option for further discussion on the table."

(17) Secretary of Defense Robert Gates stated on September 16, 2007 that "I think that the administration believes at this point that continuing to try and deal with the Iranian threat, the Iranian challenge, through diplomatic and economic means is by far the preferable approach. That's the one we are using . . . we always say all options are on the table, but clearly, the diplomatic and economic approach is the one that we are pursuing."

Below is the specific changes in Section (b), the Sense of Senate:

(b) Sense of Senate.--It is the sense of the Senate--

(1) that the manner in which the United States transitions and structures its military presence in Iraq will have critical long-term consequences for the future of the Persian Gulf and the Middle East, in particular with regard to the capability of the Government of the Islamic Republic of Iran to pose a threat to the security of the region, the prospects for democracy for the people of the region, and the health of the global economy;

(2) that it is a critical national interest of the United States to prevent the Government of the Islamic Republic of Iran from turning Shi'a militia extremists in Iraq into a Hezbollah-like force that could serve its interests inside Iraq, including by overwhelming, subverting, or co-opting institutions of the legitimate Government of Iraq;

(3) that the United States should designate Iran's Islamic Revolutionary Guards Corps as a foreign terrorist organization under section 219 of the Immigration and Nationality Act and place the Islamic Revolutionary Guards Corps on the list of Specially Designated Global Terrorists, as established under the International Emergency Economic Powers Act and initiated under Executive Order 13224; and

(4) that the Department of the Treasury should act with all possible expediency to complete the listing of those entities targeted under United Nations Security Council Resolutions 1737 and 1747 adopted unanimously on December 23, 2006 and March 24, 2007, respectively.

Clinton Pressed on Her Kyl-Lieberman Amendment Vote

During the Democratic Presidential debate in New Hampshire last night, Senator Clinton was pressed to defend her vote in favor of the Kyl-Lieberman amendment. The Washington Post repports today:

"One of the sharpest exchanges came over a vote in the Senate on Wednesday on a resolution urging President Bush to designate the Iran's Islamic Revolutionary Guard as a terrorist group. Clinton supported the measure, Biden and Dodd opposed it. Obama did not vote.

"'I am ashamed of you, Hillary, for voting for it,' said former senator Mike Gravel of Alaska.
When Clinton defended the vote as something that could lead to sanctions against a group responsible for manufacturing weapons that are being used against U.S. forces in Iraq. But Edwards challenged her for that vote.

"'I voted for this war in Iraq, and I was wrong to vote for this war,' he said. 'And I accept responsibility for that. Senator Clinton also voted for this war. We learned a very different lesson from that. I have no intention of giving George Bush the authority to take the first step on a road to war with Iran.'"

Kyl-Lieberman Amendment Passes

Kyl-Lieberman Amendment passed today with a vote of 76 to 22.

Senators who voted against the resolution were Senators Biden, Bingaman, Boxer, Brown, Byrd, Cantwell, Dodd, Feingold, Hagel, Harkin, Inouye, Kennedy, Kerry, Klobuchar, Leahy, Lincoln, Lugar, McCaskill, Sanders, Tester, Webb and Wyden.

Senators Obama and McCain did not vote on the resolution. Click here for the full Roll Call vote.

Senators Lieberman and Kyl dropped paragraphs 3 and 4 under Section (b), the Sense of Senate section, in attempts to alleviate concerns that the resolution might be taken as an authorization for the use of force against Iran.

Senator Webb stood up once again to oppose the bill, noting that if the administration proceeds as recommended in the resolution, it would be the first time that the US has designated an entire military as a terrorist organization and this could be taken as a defacto authorization for use of force. Mr. Webb again noted that there has not been one hearing on this matter and that the amendment should be withdrawn and considered in the appropriate committees.

Designating the Islamic Revolutionary Guard Corps (IRGC) a terrorist organization will only undermine US security interests, including hampering talks with Iran over Iraq security.

The IRGC is both a political and military force in Iran and its members are deeply embedded in the country’s political and economic structure. It is not clear who controls the force, though they are under the nominal control of the Supreme Leader. They act as self-appointed guardians of the revolution and they operate as a vast and nebulous network that usually does not act in unison or take a single position. The IRGC is it is very much a reflection of the disparities in Iran now. There are those who want increased engagement and openness and those who do not.

If the US designates the IRGC a terrorist organization, it will likely undermine any proponents of reform and moderation inside Iran. The designation is also likely to undermine proponents of engagement with the US and the West. The designation of the IRGC on the terrorist list could also bring a backlash against Iranian citizens working for democracy and reform.

The members of the IRGC who are responsible for their expansion into the economic arena, espcially the oil and gas sector are badly affected by the economic isolation and sanctions because they need external expertise and support. On the other hand, members of the IRGC who are involved in nefarious activities, including oil smuggling and other clandestine activities have no interest in increased engagement. For them the isolation is a boon.

US policies that encourage isolation will only play directly into the hands of those who want isolation in Iran and undermine the moderates and middle ground.

Newest on Kyl-Lieberman Amendment

A reliable Hill staffer says "we hear the amendment is now dropping sections 3 and 4." This would certainly make the amendment better, but it does nothing to deal with the cherry-picked quotes in Section (a) of the resolution. The resolution will still be inflamatory, buying into the adminitration's notion of an Iranian proxy war in Iraq and calling for the Islamic Revolutionary Guard Corps to be labeled a terrorist organization (H.R. 1400 and S. 970 also call for this measure). The Kyl-Lieberman amendment should be dropped altogether.

UPDATE at 12:22 PM:
The Senate has just resumed debate on the Defense Authorization bill. It is going to first debate the Biden amendment for two minutes and vote. Then the Kyl-Lieberman amendment will be debated for 10 minutes and voted on. There is a new version of the amendment, but I don't have a copy yet.