The Cable

Menendez livid at Obama team’s push to shelve Iran sanctions amendment

The Obama administration first urged Senate leaders to compromise on new legislation that would sanction the Central Bank of Iran (CBI) -- but then came out today against that very compromise, angering and alienating a key Democratic Senate ally.

Two senior administration officials testified Thursday morning that the current bipartisan amendment to impose new sanctions on the CBI and any other bank that does business with them is a bad idea that could alienate foreign countries, make it more difficult to pressure Iran, and raise oil prices, which could actually help the Iranian economy.

The administration's strategy of working behind the scenes to change what's become the Kirk-Menendez Iran sanctions amendment, only to publicly oppose it today, angered several senators, including Robert Menendez himself. The New Jersey Democrat took seven minutes at the Senate Foreign Relations Committee hearing to chastise Undersecretary of State Wendy Sherman and Treasury Undersecretary David Cohen at Thursday's Senate Foreign Relations Committee meeting for asking him to negotiate on their behalf, and then criticizing the compromise he struck with Sen. Mark Kirk (R-IL).

"At your request we engaged in an effort to come to a bipartisan agreement that I believe is fair and balanced. And now you come here and vitiate that agreement.... You should have said we want no amendment," Menendez said. "Everything that you have said in your testimony undermines your opposition to this amendment. The clock is ticking."

Menendez said he regretted working with the administration on the issue, and said that perhaps he should have just agreed to Kirk's original Iran sanctions amendment, which was more severe and provided the administration with less room to maneuver than the compromise amendment that is set to be voted on and passed in the Senate as early as tomorrow.

"This certainly undermines your relationship with me for the future," Menendez told the administration officials. He also urged for more drastic measures, such as a gasoline embargo on Iran. "If the Europeans are considering an embargo, we shouldn't be leading from behind, we should be leading forward."

The break between this Democratic senator, who is up for reelection next year, and the Obama administration comes two days after the administration sent three very senior officials to meet with senators to try to get them to scuttle the amendment. On the morning of Nov. 29, Treasury Deputy Secretary Neal Wolin, Deputy Secretary of State Bill Burns, and Deputy National Security Advisor Denis McDonough called an emergency meeting on Capitol Hill, multiple Hill sources told The Cable.

They sat down with Sens. Kirk, Menendez, and SFRC Chairman John Kerry (D-MA). The officials argued that the Kirk-Menendez would get in the way of their efforts to build a multilateral coalition designed to increase pressure on Iran, and they warned the amendment might cause severe disruptions to the world oil markets and therefore have negative effects on the U.S. economy. Kirk and Menendez flatly refused to back down, our sources said, while Kerry reportedly said exactly nothing in the meeting.

The officials' sentiments were echoed in a letter sent today to Senate leaders by Treasury Secretary Timothy Geithner, who we're told is personally invested in the administration effort to thwart the Kirk-Menendez amendment.

"I am writing to express the administration's strong opposition to this amendment because, in its current form, it threatens to undermine the effective, carefully phased, and sustainable approach we have taken to build strong international pressure against Iran," wrote Geithner. "In addition, the amendment would potentially yield a net economic benefit to the Iranian regime."

Geithner argued that because the Kirk-Menendez amendment would force foreign banks to choose between doing business with the U.S. or Iran, some might choose Iran and resist going along with American unilateral efforts, thereby helping the Iranian economy and hurting our own.

Menendez addressed that point by saying that the amendment allows the implementation of the sanctions to be waived if the president determines there's not enough supply in the world oil market, or if he determines a country is making progress in divesting itself from Iranian business relationships.

"So we basically say to financial institutions, do you want to deal with a $300 billion economy, or do you want to deal with a $14 trillion economy? I think that choice is pretty easy for them," Menendez said at the hearing. "So I find it pretty outrageous that when the clock is ticking, and when you ask us to engage in a more reasoned effort, and we produce such an effort in a bipartisan basis, that in fact you come here and say what you say."

One GOP Senate aide told The Cable today that while the amendment was crafted to avoid disrupting the world economy as much as possible, administration officials' warnings of economic consequences could have an effect of their own.

"The administration is going to spook the oil markets themselves in opposition to an amendment that would not," the aide said. "They could create their own self-fulfilling prophecy of driving up oil prices, so their strategy seems to be self defeating."

UPDATE: The Kirk-Menendez amendment passed the senate late Thursday by a unanimous vote of 100-0.

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The Cable

McCain demands answers on Lippert/Jones feud

Obama confidant Mark Lippert has been nominated to become the Pentagon's top Asia official, but before he can be confirmed, Sen. John McCain (R-AZ) wants answers on Lippert's internal feud with Gen. Jim Jones when they both worked at the National Security Council (NSC).

"In several passages of his book Obama's Wars, published in 2010, Bob Woodward discusses your official relationship with [National Security Advisor] General James L. Jones and offers a disturbing portrayal of your actions that could be described as arrogant and disloyal," McCain wrote to Lippert today, in a letter obtained by The Cable.

McCain didn't say outright that he wants to hold up the Lippert nomination, but he strongly implied that his support depends on Lippert's explanations of what went on during his tenure at the White House.

"Your actions while working at the NSC are an important indicator of your fundamental qualification to carry out the duties of the critically important position for which you have been nominated," McCain wrote.

He then listed 21 specific questions for Lippert to answer in written form, dealing with almost every juicy anecdote related to White House infighting found in Woodward's book. McCain wants to know exactly how Lippert interacted with Jones, as well as with political advisors at the White House. He also wants to know if Jones had power over Lippert -- or if it was the other way around.

More specifically, McCain wants Lippert to spell out whether any of the charges of insubordination found in Woodward's book are true, whether Lippert ever leaked to the press about Jones, and whether he tried to cut off Jones' access to President Barack Obama, as Woodward reported. McCain also wants Lippert to detail any and all conversations he may have had with Jones regarding their contentious time working together.

In one part of the letter, McCain asks Lippert to comment on Woodward's contention that Jones viewed him and Deputy National Security Advisor Denis McDonough as "major obstacles to developing and deciding on coherent national security policy."

McCain also wants Lippert to answer charges found in Woodward's book that he cut NSC Senior Coordinator for Iraq and Afghanistan Gen. Douglas Lute out of important discussions as well.

Behind the McCain inquiry might lie a bit of political revenge, however. Lippert was one of Obama's earliest and closest advisors on foreign policy, having been with Obama since his days as a senator. He was a key figure in Obama's presidential campaign, leading the foreign policy advisory team, and then served as chief of staff of the NSC, a position that had not existed in George W. Bush's administration but which Obama resurrected in 2009.

According to Woodward's book, Lippert was pushed out of the White House after an internal struggle with Jones, who blamed Lippert for a series of negative leaks to the press about Jones' mismanagement of the NSC.

"In July [2009], Jones laid out his case to Obama and others. All seemed to agree that it was rank insubordination. Obama promised to move on Lippert," Woodward wrote. "On October 1, the day of the McChrystal speech in London, the White House press secretary issued a three-paragraph statement that Lippert was returning to active duty in the Navy. The statement made it sound as though this had been Lippert's choice. ‘I was not surprised,' Obama said in the statement, ‘when he came and told me he had stepped forward for another mobilization, as Mark is passionate about the Navy.'"

Jones was later pushed out himself, after being blamed by top White House officials for a series of his own leaks to the press about the White House's top advisors, whom he called "the water bugs, the "Politburo," "the mafia," and the "campaign set."

The Lippert nomination was an open secret in Washington as early as April, but was delayed for months. The rumor was that Defense Secretary Robert Gates did not want Lippert, a close confidant of the White House clique, burrowed inside the Office of the Secretary of Defense.

At Lippert's Nov. 17 nomination hearing before the Senate Armed Services Committee, McCain also brought up Lippert's initial opposition to the surge in Iraq, an issue that was front and center during the feisty 2008 presidential campaign between Obama and McCain.

"Mr. Lippert appears to be qualified and I praise his service in uniform. I have serious concerns regarding his nomination. At a meeting in my office I asked Mr. Lippert his views on the success of the surge in Iraq and I find his answers to be less than satisfactory," McCain said on Nov. 17.

Lippert testified at his hearing that he never leaked to the press about Jones and that his departure from the White House was due to his own personal desire to return to active duty military service.

"In terms of the press accounts, I did not leak to the press about General Jones. My departure from the White House was voluntary. I actually turned down a promotion at the White House to return to active duty," Lippert said at the hearing. "General Jones and I worked collaboratively on many issues and I'm proud of what we accomplished, but there was also times we disagreed, but I knew General Jones was the boss."

McCain pressed Lippert to admit that his departure had anything to do with Jones, but Lippert would only say that he left voluntarily after being offered a "promotion" to serve in the White House Military Affairs office.

In addition to McCain, Sen. John Cornyn (R-TX) has also indicated he might oppose the Lippert nomination, due to Cornyn's ongoing unhappiness with the administration's refusal to sell Taiwan new F-16 fighter planes, which are built in Cornyn's home state. Cornyn had filed an amendment to the defense policy bill aimed at forcing the administration to make the sale, but that amendment was spiked this week.

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