WASHINGTON – Homeland Security and Governmental Affairs Committee Chairman Joe Lieberman, ID-Conn., and Ranking Members Susan Collins, R-Me., Wednesday criticized Administrations of both parties for awarding nearly $1 billion in federal contracts to companies doing business in Iran between 2005 and 2009, and for failing to rigorously enforce the Iran Sanctions Act, passed in 1996.
At a hearing entitled “Why Does the U.S. Government Do Business with Companies Doing Business in Iran?” the Senators also warned the companies engaging in commercial activity in Iran that they should be forced to choose between the U.S. market and Iran.
Prohibiting federal contracts to companies that violate the Iran Sanctions Act is one of the actions authorized in that law. No company, however, has been sanctioned under the law in more than a decade.
“The U.S. government’s market power gives us the ability 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. “We no longer should allow businesses to do both.
“But presidents of both parties have failed to enforce the existing law. As a result, many companies that make money from the United States government continue to do business with Iran, helping to sustain – directly or indirectly – the fanatical and anti-American regime in Tehran that regularly promises to bring ‘Death to America.’
“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.”
Collins said: “I am extremely concerned by the GAO’s findings that the U.S. government entered into almost $880 million in contracts with seven foreign firms that had investments in Iran’s energy sector. 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.
“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.”
Congress is on the verge of passing tough new sanctions against companies doing business in Iran and a stricter prohibition on U.S. government contracts to companies that violate sanctions.
Based on publicly available information, the Government Accountability Office (GAO) previously identified 41 foreign companies that have conducted commercial activity in support of Iran’s energy sector. At the request of Senators Lieberman, Collins, and John Kyl, R-Ariz., GAO followed-up with the report released at the hearing that found seven of the 41 companies received combined payments of nearly $880 million from the Department of Defense – including $319 million to Repsol of Spain and $312 million to Total of France for the purchase of fuel, and $111 million to Daelim Industrial Co. of South Korea for the construction of military family housing in Korea.
An investigation by The New York Times, published in March, found the federal government awarded more than $107 billion in contracts, grants, and other benefits over the last decade to foreign companies, as well as to foreign subsidiaries of U.S. companies, that have engaged in commercial activity in Iran. This includes $15 billion to companies that appear to have violated the Iran Sanctions Act.
Companies identified by The Times include Royal Dutch Shell, which has helped develop oil fields in Iran and has received over $11 billion from the U.S. government, mostly through contracts for the purchase of fuel for the Department of Defense.