The Cable

Steinberg: No need for another Iran sanctions bill

The Obama administration will expand sanctions on Iran and countries that do business with it, but new congressional legislation is unnecessary, according to Deputy Secretary of State Jim Steinberg.

The House and Senate have each unveiled a bill that would tighten existing sanctions, compel the administration to enforce penalties already on the books, and levy a host of new sanctions against members of Iran's regime and companies that aid Iran's energy, banking, or arms sectors. The bills are a follow-up to the Comprehensive Iran Sanctions, Accountability and Divestment Act (CISADA) that Congress passed and President Barack Obama signed in July 2010.

Lawmakers are increasingly frustrated that the administration has decided not to use CISADA to penalize many companies from third-party countries such as China that are believed to be violating the sanctions, while only punishing a couple of firms from countries such as Belarus. The new bills are meant to force action on Chinese companies. But Steinberg said that the administration doesn't support another round of sanctions legislation and will proceed with enforcement on its own timeline.

"We think we have powerful tools, and we've welcomed CISADA and we think CISADA is a powerful tool, and what we've seen, not just with China but with everybody, is that the availability of that has caused countries and companies to stop doing things that they might otherwise do," Steinberg told The Cable in a June 6 interview on the sidelines of the Shangri-La Security Dialogue in Singapore.

Steinberg fundamentally disagreed with senators who believe that China has not been adhering to the sanctions and allowing its companies to backfill the business in Iran left open by the departure of firms from U.S. allies such as Japan and South Korea.

"I think the [Chinese] record has been reasonably good in terms of what they've done. It's not perfect, and we continue to work with them, we continue to keep some actions of theirs under investigation and review," he said.

"I think people -- if one would have asked two years ago, for example, on dealing with Iran, how much we would be in sync with China -- I think they would be amazed how well this has worked, both in terms of the formal stuff in the Security Council, but also in the P5+1," said Steinberg.  "The Chinese have been fully on board, they haven't undercut it, they've been very clear and consistent with the need for Iran to meet their obligations and they've worked as a partner with us on that. They've been very restrained in their political and economic engagement with Iran."

Will the administration ever sanction Chinese companies for doing business in Iran, which, according to the Government Accountability Office, continues to this day?

"It depends what they do," Steinberg said. "As we've said to the Congress and to everybody, in the first best instance what we want is to see countries do it voluntarily, and we've seen a number of cases where we've raised issues of concern with China, and we've had some progress."

The lawmakers who spent months drafting the new sanctions legislation and who are planning to push it through Congress this summer fundamentally disagree with Steinberg's reading of Chinese behavior.

 "I worry that the Obama administration has given Chinese banks and companies a get out of jail free card when it comes to sanctions law, and they should not," Sen. Mark Kirk (R-IL) said at last month's AIPAC conference in Washington.

In a Tuesday interview with The Cable, Kirk said that the Senate bill has strong leadership from both parties, including lead sponsors Jon Kyl (R-AZ), Robert Menendez (D-NJ), Joe Lieberman (I-CT), and many others.

"The hollowness of the administration's enforcement is evident when you compare how much the U.S. and Iranian economies grew last year. Because Ahmadinejad's economic growth was faster than Obama's, that underscores our concern that the results are meager at best," Kirk said.

"We have overwhelming bipartisan consensus here and in the House as well, so I would say to Secretary Steinberg, prepare for incoming legislation."

The Cable

State Department facing several nomination fights

It's going to be a long summer for the State Department's legislative affairs bureau, which is about to find itself dealing with whole host of nomination battles on Capitol Hill.

GOP senators were not shy last year about using their power to hold up nominees in order to extract concessions from the State Department, and will likely expand that strategy in the coming months. With significant turnover in Foggy Bottom and a contentious campaign season approaching, the Republican caucus in the Senate is planning to hold up several State Department appointments in order to wring concessions from the administration or torpedo certain nominations altogether.

Some of the nomination fights are being previewed out in the open. For example, Senate Minority Whip Jon Kyl (R-AZ), announced last week on the Senate floor that he intends to stall the nomination of National Security Council Senior Director for Russia Mike McFaul as the next ambassador to Moscow unless the administrations answers his questions about missile defense cooperation with Russia.

"The administration owes senators information about what National Security Staff member Michael McFaul ... meant when he briefed the press on May 26 that ‘we got a new signal on missile defense cooperation that as soon as I'm done here I'll be engaging on that with the rest of the U.S. government,'" Kyl said. "I'm concerned that my staff asked the National Security Staff about this over a week ago and we still have heard nothing back. I hope to hear back from the administration soon, especially if the administration expects the Senate to act promptly on Mr. McFaul's nomination."

Kyl and several other senators have concerns not only about the missile defense cooperation McFaul has been working on with Russia, but also about the overall trajectory of the U.S.-Russia reset policy that McFaul has been leading since joining the administration.

GOP Senate opposition to other State Department and USAID nominees is often less public but nonetheless effective at delaying their confirmations.

For example, Senate leadership "hotlined" the nomination of Mara Rudman to become the new USAID assistant administrator for the Middle East over two weeks ago. Hotlining is a Senate procedure by which a nomination is set for quick approval by unanimous consent and the pending approval is sent to all senators to make sure there are no objections.

But Rudman, who most recently served as chief of staff to Special Envoy George Mitchell, was never voted on, meaning that at least one senator objected. We're told by multiple GOP aides that in fact, there are several GOP senators who have issues with the Rudman nomination.

Two Senate GOP staffers told The Cable that in both her time as a State Department and as a Senate staffer before that, Rudman rubbed several people the wrong way with her abrasive style and created ill will that remains to this day. Senators also want to understand her role in the administration's Israel policy, which they are obviously dissatisfied with.

"Senate staff believes her track record shows she's not an effective leader based on her past government service," one senior GOP senate aide said.

Rudman may ultimately be confirmed, but neither the Senate nor the State Department seems to be pressing for quick action. "It's not a high priority for the Senate or the administration right now," the aide said.

On Thursday, two more high-level State Department nominees will become targets for GOP senate holds. The Senate Foreign Relations Committee is set to approve the nominations of Bill Burns as deputy secretary of State and Gary Locke as ambassador to China. Once the committee approves the nominations, any one senator can impose a hold.

Senate staffers are also looking into the history of Wendy Sherman, who hasn't even been nominated for anything, but who The Cable reported is the frontrunner to replace Burns as undersecretary of State for Political Affairs. There's no formal opposition to Sherman yet, but her time as North Korea coordinator during President Bill Clinton's administration will be a focus of her confirmation hearing if and when she is nominated.

Lastly, a potential target for GOP attention is David Adams, the nominee to replace Assistant Secretary of State for Legislative Affairs Richard Verma. The legislative affairs team is the office that has been most involved with the Senate GOP when it comes to answering requests for information. Even if Adams gets confirmed, he and the rest of his office are in for a long, hot summer of tough confirmations.