Senate Homeland Security Committee Probes U.S. Contracts With Companies Doing Business With Iran

By Christopher Neefus | May 17, 2010 | 12:58 AM EDT

Pro-government demonstrators hold posters of late revolutionary founder Ayatollah Khomeini and supreme leader Ayatollah Ali Khamenei, and anti-US placards during Thursday’s rally in Tehran. (AP Photo/Vahid Salemi)

Washington ( – From 2005 to 2009, the Defense Department held $880 million worth of contracts with seven international corporations that do significant business with Iran in the oil, gas and petrochemical sectors, and the chairman of the Senate Homeland Security and Governmental Affairs Committee wants to know why.
Sen. Joe Lieberman (I-Conn.), conducted a hearing last Wednesday to probe the deals, which arguably should be prohibited under current economic sanctions.
“The title of our hearing today really says it all,” Lieberman said. “Iran Sanctions: Why does the U.S. government do business with companies doing business in Iran?’”
The hearing was prompted by the release last week of a Government Accountability Office report, which indicated that the U.S. had major contracts with 41 firms that invested in Iran’s energy sector.
“From fiscal years 2005 to 2009, the U.S. government obligated almost $880 million in contracts to 7 of these 41 firms,” the GAO report said.
Among those companies are Spain’s Repsol and France’s Total, oil companies from which the Defense Department purchased fuel, including jet fuel and gasoline, both for naval and aviation use; Daelim Industrial, a South Korean company that is building overseas housing for the military; and Italy’s ENI, also for petroleum products.
“The U.S. government’s market power gives us the capacity, I think, to influence the behavior of companies doing business with Iran and to give them a choice between doing business with us or doing business with Iran,” Lieberman said in his opening remarks. “We no longer should allow businesses to do both.”
Lieberman said presidents “of both parties” had failed to enforce the existing law.
“(A)s a result, many companies that make money from the United States government continue to do business with Iran and in Iran, helping to sustain -- directly or indirectly -- the fanatical and anti-American regime in Tehran that regularly promises to bring ‘Death to America,’” he said.
Sen. Susan Collins (R-Maine), the ranking Republican on the committee, said she was deeply troubled by GAO’s findings, and asked that the Obama administration enforce the current law.
“I am at a loss to explain why the United States government would do business with corporations that are, at least indirectly, aiding and abetting Iran’s nuclear ambitions. Obviously, this practice goes against our own national security interests,” Collins said.
“The GAO report exposes evidence of potentially serious violations of our current sanctions regime. In light of this alarming information, we not only need to pursue rigorous enforcement of our current laws but also to strengthen our sanctions against Iran. My hope is that this GAO report will prompt the administration to enforce current law and that it will provide a sense of urgency to completing the conference negotiations on the Iran Sanctions Act.”
The Comprehensive Iran Sanctions, Accountability and Divestment Act is currently in conference committee, a process by which select members of Congress will try to reconcile the two versions of the bill passed by the House and Senate before it goes to President Obama’s desk for a signature.
That bill would require the administration to freeze the assets of Iranians dealing in weapons proliferation or terrorism and outright prohibits the government form making purchases from companies that qualify for sanctions.
It would strengthen the current Iran Sanctions Act, a law passed in 1996 and renewed in 2001 aimed at curtailing Iran’s ability to fund its WMD development and terrorist activities by keeping them from developing their energy sector.
Under that law, the president is meant to choose two of six sanctions to impose on companies he determines to have been willfully investing in that sector, one of which would be a total ban on purchasing products from those companies.
“The State Department could take immediate action to improve our efforts simply by enforcing current law,” Collins pointed out. “Unfortunately, this lack of enforcement is not a new problem. As far back as 1996, Congress has attempted to extinguish investment in the energy sector, yet despite clear evidence of violations of that law, not a single company has ever been sanctioned.”
Added Lieberman: “I hope that this hearing, the GAO report, and the witness testimony send a clear and unmistakable message to those companies: Either do business with Iran’s $250 billion a year economy, or do business with America’s $13 trillion economy, but you cannot do business with both. It is simply unacceptable for the federal government to enrich foreign firms that are enriching the extremist, repressive, terrorist government of Iran.”

Sponsored Links