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Tuesday, 15 December 2009
Let us Praise US Rep. Mark Kirk and Undersecretary of the Treasury, Stuart Levey

As expected today, the US House of Representatives passed HR 2194, the  Iran Refined Petroleum Sanctions Act (IRPSA) by a vote of 412 to 12.  That will gratify Iranian American Amil Imani, of Former Muslims United. The bill, authored by Rep. Brad Sherman (D-CA) had more than 343 co-sponsors which ensured its passage in the House. The Senate Banking Committee passed a companion IRPSA measure (S. 908) in late October. The Senate bill has over 76 co-sponsors. That may facilitate quick passage of the measure for possible enactment should President Obama sign it into law.   

If that occurs it will mean for Imani and other opponents of the oppressive Islamic Republic that another important squeeze will be placed on an already tottering Iranian economy. For those throughout Iran engaged in current protests against the Mahdist Mullahs and President Ahmadinejad, intent on completing their nuclear project, the passage of IRPSA will send a signal of American commitment and the unofficial end of the wavering ‘engagement’ project of President Obama.

There are, in our opinion, two men who have been effective stalwarts in pushing this most important sanction against Iran: Rep. Mark Kirk (R-IL), the architect of the original House IRPSA bill and Undersecretary of the Treasury for Terrorism and Financial Intelligence, Stuart Levey. Kirk had formed the bi-partisan House Iran Working Group in 2004 and co-authored the original refined petroleum sanctions proposal with Rep. Rob Andrews (D-NJ).  Levey, a Bush holdover has been a very effective government appointee leading the enforcement of both tough financial and petroleum sanctions.

We had interviewed Kirk in a wide ranging NER article in September 2008. In a response to the question about his efforts pushing for refined petroleum sanctions he responded:

We looked at options with regard to US foreign policy with Iran. Option one; let the United Nations deal with this issue using sanctions. 50 percent of UN General Assembly resolutions condemn Israel. So there are no prospects for a fair shake. The other option is boycotting Iran’s oil shipments, but that is an extremely unpredictable and expensive option. Rob and I have spent hundreds of hours. We have met with our allies, British, Israelis, and French, UN officials, State Department and Defense Department. We even had an extraordinary lunch with the Iranian UN Ambassador reviewing our options. We found that Iran’s greatest strength and weakness can be used for power diplomacy. The Mullahs have certainly mishandled Iran’s energy picture. This nation has, with its own technicians, produced a lot of oil but is still behind in their refinery capacity so that they have to import over  40 percent of their gasoline from overseas. This would give the United States the opportunity to implement what Jack Kennedy would have called a ‘gas quarantine’ which would bring tremendous pressure on the Iranian government to live up to its commitments to the Nuclear Non Proliferation Treaty. Recently, we have obtained a lot of support for this idea. About two months ago, Senator Obama endorsed the idea. Senator McCain endorsed it. Prime Minister Olmert of Israel endorsed it. However, we don’t have the full support of the State Department; currently Secretary Rice is against this idea. The likelihood is that the coming Administration which will be sworn in, whether a President Obama or a President McCain will look very favorably towards this option. 

Kirk had an op-ed in yesterday’s Jerusalem Post:

 “Iran sanctions are in Obama's hands.” He noted the relentless chronology that he and others has doggedly pursued to arrive at today’s IRPSA vote and the necessity of President Obama to implement it:

To stop the emergence of a nuclear Iran and avoid military conflict, Congressman Andrews and I conducted a comprehensive analysis, searching for vulnerabilities in Iran's economy.

With the help of the Congressional Research Service, we discovered a critical Iranian weakness. Despite its status as a leading oil exporter, Iran so mishandled its domestic energy supply that the regime relied on foreign sources of gasoline for 40 percent of its supply. A restriction of gasoline deliveries to Iran administered though multilateral sanctions and enforced by the world's most powerful navies would pit the Western democracy's greatest strength against Iran's greatest weakness - all without a shot being fired.

In 2005 and again in 2006, we introduced congressional resolutions calling for a multilateral restriction of gasoline deliveries to Iran as the most effective economic sanction to bring Iran's leaders into compliance with their commitments under the Nuclear Non-Proliferation Treaty. In 2007, we introduced the Iran Sanctions Enhancement Act to expand existing US sanctions to the provision of gasoline to Iran - including suppliers, brokers, shippers and insurers. This April, Congressman Brad Sherman (D-Calif.) and I reintroduced this bipartisan legislation. Following our bills, Iran imposed an unpopular gasoline rationing scheme, showing it was worried.

Last year, candidates Barack Obama and John McCain both endorsed the gasoline restriction, and this year, House and Senate leaders reintroduced the gasoline sanctions bill as the Iran Refined Petroleum Sanctions Act, now headed by Congressman Berman and our coalition of 343 congressmen and 76 senators behind the bill.

After four years and six months, Congress will finally consider our gasoline restriction legislation this week. While this bill could emerge as the key tool to peacefully end our standoff with Iran, it will prove meaningless if the president keeps gasoline sanctions locked in his diplomatic toolbox.

Our Petroleum Sanctions Act would add a ban on the provision of gasoline to Iran under the old 1996 Iran Sanctions Act, a law that already makes it illegal to invest more than $20 million in Iran's oil and gas sectors.

Under this old law, our president must declare someone in violation before sanctions take effect. Few realize that no American president has ever enforced this provision. According to the Congressional Research Service, at least 20 companies are currently violating the 1996 law.

For the threat of sanctions to change Iran's decision-making, Iranian leaders must believe an effective gasoline sanction is credible. If President Obama, like his predecessor, lacks the will to enforce the 1996 Sanctions Act, we should not expect Iranian leaders to believe a new threat of additional sanctions.

In October, Congressman Ron Klein (D-Fla.) and I authored a bipartisan letter to the president urging him to enforce the Iran Sanctions Act and demonstrate to Iranian leaders the credible potential for a restriction of their gasoline. Fifty Democrats and Republicans signed our bipartisan letter. When asked why the administration failed to enforce the 1996 law, Assistant Secretary of State Jeffrey Feltman promised a 45-day review for the State Department to determine whether it would pursue sanctions against current lawbreakers. Secretary Feltman's clock ran out this weekend.

For the House's new 2009 Iran Refined Petroleum Sanctions Act to succeed, the Iranians must believe the president will enforce it. Otherwise, we will continue down a failed path of diplomacy in the absence of effective sanctions.

As the architect of this legislation, I hope the House and Senate will pass our Iran gasoline sanctions bill into law. As an American, I hope the President will enforce it.  

Undersecretary of The Treasury  Stuart Levey has been involved in a gamut of financial sanctions and in conducting negotiations with some of the off shore refiners involved in petroleum trade with Iran. In a recent Newsweek profile of Levey, Obama’s Enforcer,” we find how effective he has been in this effort:

Foreign companies doing business in Iran are already coming under pressure. Among them is Reliance, the giant Indian energy and petrochemicals firm that for years has been supplying refined gasoline to Iran. In early 2008, under pressure from Levey, two giant French banks—BNP Paribas and Crédit Agricole—cut off letters of credit for Reliance's Iran deals. Then late last year an Arizona State University law professor and former State Department nuclear-nonproliferation official, Orde Kittrie, discovered that Reliance had benefited from two U.S. Export-Import Bank loan guarantees totaling $900 million. Members of Congress—led by Democratic Rep. Brad Sherman of California and Republican Mark Kirk of Illinois—demanded that the Ex-Im Bank cut off U.S. taxpayer assistance. After consulting with its high-priced Washington lobbying firm, BGR, Reliance quietly passed the word to members of Congress: it was halting all sales to Iran and would insist that its trading partners do the same. "We are not selling gasoline to Iran either directly or through third parties," Reliance said in a statement to NEWSWEEK. "To this end, we include a destination-restriction clause in our contracts to prevent sales to Iran."

Kirk may get recognition from his Illinois constituents for this and other important efforts at thwarting Iran’s nuclear program. He is a candidate there for the 2010 US Senate race in a seat previously held by President Obama. The current incumbent Roland W. Burris has been an embarrassment to both himself and to the floundering Democratic Party in Illinois.

Levey, will, we hope be retained by the Obama Administration to enforce what Kirk has authored and his House colleagues may enable with today’s passage of IRPSA. At least that is the hope. If so, it will doubtless bolster Kirk’s election prospects in the 2010 Illinois US Senate race. Either way, as Kirk’s op ed title on the House IRPSA vote in the Jerusalem Post said, “it is in Obama’s hands.”

Posted on 12/15/2009 3:12 PM by Jerry Gordon
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