Congress rebuffs easing of Iran sanctions

The Associated Press

By DONNA CASSATA, Associated Press

WASHINGTON (AP) — Republicans and Democrats determined to look tough on Iran and avoid any election-year challenges to their pro-Israel bona fides are rebuffing Obama administration pleas to ease proposed sanctions on Iran's Central Bank.

The administration argues that the crippling penalties would undercut a carefully calibrated international effort targeting Tehran and drive up oil prices, a potential economic boon that would help finance Iran's pursuit of a nuclear weapon while hitting cash-strapped Americans at the gas pump. Just weeks after announcing a new round of restrictions, President Barack Obama on Thursday dismissed "some of the political noise out there" and said his "administration has systematically imposed the toughest sanctions on Iran ever."

Obama also reiterated that he was considering all options for dealing with Iran but declined to say what those options included.

Still, Republicans and Democrats are pressing ahead with sanctions that would target foreign banks that do business with Iran's Central Bank, a measure that the Senate resoundingly endorsed last week on a 100-0 vote.

"The administration does understand the centrality of this issue to forcing Iran. They would like to do it unimpeded by congressional mandates. That's true of every administration," Rep. Howard Berman of California, the top Democrat on the House Foreign Affairs Committee, said in an interview. "On this, we're not going to just roll over and take their suggestions."

The showdown between the administration and Congress encompasses policy realities and political maneuvering. Tough sanctions are the most viable option short of a military strike on Iran that could plunge the region into another war. Looking ahead to the 2012 elections, Republicans and Democrats are intent on presenting a record of hawkishness toward Iran and unwavering support for Israel, mindful of the impact on American Jewish voters and their generous financial contributions to the political parties.

The sanctions measure sponsored by Sens. Mark Kirk, R-Ill., and Bob Menendez, D-N.J., was added to a broader defense bill now the subject of closed-door negotiations between the House and Senate. Lawmakers hope to produce a final version of the policy legislation next week.

Few lawmakers, even Democrats, have argued the administration's case for weakening the sanctions.

"I think Democrats are scratching their heads that the administration is leading them into a policy provision which not a single Democratic senator can support," Kirk said in an interview. He said he spoke to the chairman of the House Armed Services Committee, Rep. Howard "Buck" McKeon, R-Calif., on Thursday and he indicated that the House negotiators would accept the sanctions provision.

The Kirk-Menendez measure would target foreign financial institutions that do business with the Central Bank of Iran, barring them from opening or maintaining correspondent operations in the United States. It would apply to foreign central banks only for transactions that involve the sale or purchase of petroleum or petroleum products.

The sanctions on petroleum would only apply if the president, in six months, determines there is a sufficient alternative supply and if the country with jurisdiction over the financial institution has not significantly reduced its purchases of Iranian oil. It also allows the president to waive the penalties based on national security.

Treasury Secretary Timothy Geithner, in a Dec. 1 letter to senators, said the administration opposed the measure in its current form because it would undermine its effort to bring international pressure on Iran. He also warned that instead of penalizing Tehran, the sanctions could have the opposite effect by boosting oil prices and benefiting Iran financially.

"Iran's greatest economic resource is its oil exports," Geithner wrote. "Sales of crude oil line the regime's pockets, sustain its human rights abuses and feed its nuclear ambitions like no other sector of the Iranian economy."

The administration is seeking both substantive and technical changes, including delaying implementation of all the penalties for six months. Berman favors speeding up the penalties to four months.

In arguing for tougher sanctions, lawmakers cite the recent International Atomic Energy Agency report that Iran is suspected of clandestine work that is "specific to nuclear weapons," its alleged role in the plot to assassinate the Saudi ambassador in the United States and the attack on the British Embassy in Tehran. U.S.-Iranian relations have been put further on edge by Iran's capture of a high-tech, stealth CIA drone on a surveillance mission over Iran.

In letters and statements this week, lawmakers have made their case for sanctions to the House and Senate negotiators.

"The goal ... is to inflict crippling, unendurable economic pain over there. Iran's banking sector — especially its central bank — needs to become the financial equivalent of Chernobyl: radioactive, dangerous and most of all, empty," said Rep. Gary Ackerman, D-N.Y.

Two weeks ago, the Obama administration announced a new set of penalties against Iran, including identifying for the first time Iran's entire banking sector as a "primary money laundering concern." This requires increased monitoring by U.S. banks to ensure that they and their foreign affiliates avoid dealing with Iranian financial institutions.

Arguing that it isn't enough, the powerful pro-Israel lobby, the American Israel Public Affairs Committee, and advocacy group American Jewish Committee, endorsed the tougher congressional sanctions without any changes. AIPAC sent a letter to lawmakers negotiating on the defense bill; the AJC wrote to Defense Secretary Leon Panetta.

"Most of us know in the end that the forces in Iran are not going to go quietly into the night," Ackerman said in an interview. "We may have to send them into the night not so quietly."