President Barack Obama's administration is working on the details of how it will implement crippling new sanctions against Iran, and the two senators who wrote the legislation warned the White House today not to water down the measures.

"We understand that the administration is drafting rules to guide the implementation of the law and we hereby seek to convey the legislative intent underlying certain terms and phrases in the amendment and to ensure that the positive developments that have occurred as a result of the amendment are buttressed  by the administrative rules," wrote Sens. Robert Menendez (D-NJ) and Mark Kirk (R-IL) in a letter today to Treasury Secretary Timothy Geithner, who traveled personally to Japan and China this month to discuss the issue.

The State Department has sent teams to several countries urging them to comply with the new measures imposed by the Menendez-Kirk amendment, but the administration's recent enthusiasm for the sanctions is at odds with their attempts to water down the sanctions language while it was going through Congress. The law would punish any country or bank that does business with the Central Bank of Iran (CBI), or with Iran's state-controlled oil sector.

That's why Kirk and Menendez, along with their allies, are now worried that the Obama administration will try to implement the rules in such a way that will allow some countries that refuse to stop doing business with Iran to wiggle off the hook, by delaying implementation for months or claiming that other countries' adherence is more robust than it really is.

Obama, for his part, has hailed his administration's success in establishing a broad-based coalition aimed at isolating Iran.

"When I came into office, what we had was a situation in which the world was divided, Iran was unified, it was on the move in the region. And because of effective diplomacy, unprecedented pressure with respect to sanctions, our ability to get countries like Russia and China -- that had previously balked at any serious pressure on Iran -- to work with us, Iran now faces a unified world community, Iran is isolated, its standing in the region is diminished. It is feeling enormous economic pressure," the president told Time in an interview released today.

The Menendez-Kirk letter list several concerns about the forthcoming rules, which could be unveiled as early as next week. Their two main worries are that the administration will allow countries to avoid being penalized by saying they have achieved "significant reductions" in their dealing with Iran, and that Obama will postpone implementation of the sanctions on national security grounds.

The implementation rules will define exactly what the term "significant reductions" means. Menendez and Kirk want the administration to use the same definition as was used for the last round of Iran sanctions, as dictated by the Comprehensive Iran Sanction, Accountability, and Divestment Act of 2010 (CISADA), to avoid any confusion.

"To ascribe more variable terminology to the definition of ‘significantly reduced' would diminish the ability of countries to understand and comply with the amendment," the senators wrote. "An unevenly applied interpretation would also call into question the seriousness of the sanctions policy and send mixed signals to both Iran and our allies."

The senators' other main concern is that Obama will avail himself of the "national security waiver" found in the law to postpone implementing the new sanctions altogether for another 120 days. If he doesn't invoke this waiver, sanctions against countries that do business with the CBI could take hold Feb. 29. If Obama uses the waiver, he won't have to sanction any countries until late June, which tracks with the timeline the law specifies for the imposition of the oil-related sanctions.

The senators also don't think Obama should be able to waive all the sanctions with one stroke of the pen. They want him to have to waive sanctions for each country on a case-by-case basis. That's one of the things the forthcoming rules will address.

"We would welcome an opportunity to discuss these points with you prior to the publication of the final rule for the Menendez-Kirk amendment," the senators wrote -- a nice way to complain to the administration that they are not being properly consulted.

A senior Senate aide who works on the issue was more direct with The Cable.

"There's been little to no consultation or communication on this rule," the aide said. "There is growing concern that the administration may be moving toward a broad and non-specific definition for ‘significant reduction,' and the intention of the authors is that every bank that is in violation of the law would need its own national security waiver in order for the president to exempt them."

The actual rule writing is done at Treasury's Office of Foreign Assets Control (OFAC), run by Adam Szubin.

"The administration is hard at work drafting the regulations implementing the legislation.  We are already using this law, in concert with our other efforts, to reduce Iran's access to oil revenue, both by working with our partners to significantly reduce their imports of Iranian crude and by impeding the CBI's ability to receive payment for whatever oil Iran is able to sell," a Treasury Department spokesman told The Cable. "We will continue our intensive engagement to ensure that the maximum amount of pressure is exerted by the international community against Iran's illicit nuclear program."

The resignation of President Barack Obama's chief of staff shows that the White House is unstable and its national security policies remain dangerous, a top surrogate for GOP presidential candidate Mitt Romney told The Cable today.

"This unexpected move of Bill Daley out points to a lack of stability," said former Senator Jim Talent in a Tuesday interview.

Talent, who is one of Romney's closest advisors on national security, also harshly criticized Obama's decision to revamp U.S. military strategy, which he announced at the Pentagon on Jan. 5. The new strategy review, released only weeks ahead of Obama's fiscal 2013 budget request, calls for a "smaller and leaner" military and backs off from previous strategy documents that mandated the U.S. military maintain the capability to fight two major wars at the same time.

"I think it's going to encourage provocative actions around the world," said Talent. "It's a signal that America's not going to continue exercising a leadership role, it's very dangerous. And you know that one of the amazing things about it is that it's explicitly a budget-driven decision, in other words there's no pretense that this is a change based on strategic analysis."

When announcing the new defense strategy, Obama said, "The tide of war is receding" -- but the Romney team doesn't see it that way at all.

"That sends the wrong message, it encourages other countries to believe that they can provoke and challenge us, and it will end up costing us more money," said Talent. "It's so much an explicit confession of bankruptcy in terms of defense policy, I almost don't know how to respond to it."

In fact, Talent said that Obama's strategic review is more damaging than the military cuts made by President Bill Clinton's administration following the end of the Cold War.

"That two-war standard was continued in the post-Cold War era by the Clinton administration and was deemed necessary in the 1990s -- and that was before the 9/11 attacks, that was before the rise of Chinese power, and that was before Russia reassumed a more aggressive posture," said Talent. "So if it was necessary according to President Clinton in the 1990s before those additional risks ... how could it not be necessary now?"

Talent laid some of the top foreign policy priorities in a Romney administration, framing them as areas where it was necessary to fix Obama's missteps. These include a new policy to prevent Iran from getting a nuclear weapon, the importance of channeling China in a direction of peaceful competition rather than aggression, the need to reestablish the strength of traditional allies, the need for the United States to play a larger leadership role in the international community, and the need to reverse Obama-era defense cuts and restore military strength.

"Governor Romney believes that the Obama administration has pursued a policy of weakness across the spectrum of areas," Talent said.

Your humble Cable guy appeared on MSNBC's Rachel Maddow show last night to discuss the international efforts to increase pressure on Iran and Iran's threats to close the Strait of Hormuz.

Take a look:

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The Iraqi government has promised to shutter Camp Ashraf -- the home of the Iranian dissident group Mujahedeen e-Khalq (MEK) -- by Dec. 31. Now, the United Nations and the State Department are scrambling to move the MEK to another location inside Iraq, which just may be a former U.S. military base.

The saga puts the United Nations and President Barack Obama's administration in the middle of a struggle between the Iraqi government, a new and fragile ally, and the MEK, a persecuted group that is also on the State Department's list of foreign terrorist organizations.

The Marxist-Islamist group, which was formed in 1965, was used by Saddam Hussein to attack the Iranian government during the Iran-Iraq war of the 1980s, and has been implicated in the deaths of U.S. military personnel and civilians. The new Iraqi government  has been trying to evict them from Camp Ashraf since the United States toppled Saddam in 2003. The U.S. military guarded the outside of the camp until handing over external security to the Iraqis in 2009. The Iraqi Army has since tried twice to enter Camp Ashraf, resulting in bloody clashes with the MEK both times.

Now the United Nations, led by Martin Kobler, the head of the U.N. Assistance Mission in Iraq (UNAMI), is working with the State Department to convince the Iraqi government and the MEK to open up a new home for MEK members inside Iraq, at a facility near the Baghdad airport. U.S. officials won't confirm, but also won't deny, that facility is a U.S. military base that was recently handed over to the Iraqis.

"Ambassador Kobler and we are working flat out to put together the deal for the beginning of the implementation of his plan, which is to move the people in Camp Ashraf to a new facility," a State Department official told reporters in a special Monday briefing. The United Nations and State are hoping that if an agreement is reached, the Iraqi government will push back the deadline and not invade Camp Ashraf on Dec. 31 and forcibly extradite the MEK to Iran. But time is running out.

"Time is extraordinarily short," the State Department official said. "Oh yes, we're talking days."

The State Department official said the new facility under discussion is near the Baghdad airport, and has extensive infrastructure that "is very well known to the United States." Pressed by The Cable, the official refused to confirm that it was a former U.S. military base, but wouldn't deny it either. "It's a highly credible facility," the official said.

The official could not say if there was any precedent for a group that the United States labels a foreign terrorist organization being housed in a facility built by the U.S. military with U.S. taxpayer dollars, but emphasized that all U.S. military installations have now been turned over to the Iraqi government. The Victory Base Complex near the airport has several facilities that could be used for the Camp Ashraf residents.

Nobody knows how many people are in Camp Ashraf, because nobody can go inside. The residents are also suspected to be well armed. There could be as many as 3,200 people there, according to the State Department. If they are evicted from the camp, some will voluntarily go back to Iran and some will go to other countries. Others still may not actually be MEK members but could be living there for their own reason, making their relocation easier, the official said. The unknown number of "card-carrying members" of the MEK who can't or won't be relocated are the ones who the United Nations and State are trying to move to the new camp.

The United Nations and the Iraqi government have agreed on the basic way forward, but the MEK is not on board, the State Department official said. The Iraqi government won't talk directly to the MEK, and the MEK leadership living in Paris may have different priorities than the people actually living in Camp Ashraf.

Of course, the Iraqis have been warning for months that they would close Camp Ashraf by the end of the year. So why is everybody scrambling in the last two weeks? The State Department is placing the blame squarely on the MEK.

"For a long time, the MEK position was ‘here we are and here we stay, period,'" a State Department official said. "In recent days we've had the first signs that the MEK is finally, at long last, beginning to engage in a serious way, rather than simply politically through its many, many advocates. This is a good sign."

Reporters at the briefing wondered why the United Nations and State think simply relocating the MEK to another facility will solve the problem of its status as a terrorist group whose members are unable to get refugee status in a country where they are not welcome. The official said the new facility would be better because it would give the Iraqi government some control over what goes on there.

"[Camp Ashraf] is a state within a state. It is run by the MEK and when anybody else tries to enter, well, we've seen what occurs," one State Department official said, explaining that the new camp would have some type of Iraqi government administration and yet not be in total control of the MEK. "Iraqi soveriegnty will prevail with a robust set or arrangements and U.N. monitoring."

Another reason the United Nations and State are pushing for the MEK to be moved from Camp Ashraf to another facility is that the U.N. High Commission for Refugees (UNHCR) has refused to give refugee status to Ashraf residents because of the MEK's tight control over the people there.

"Many international observers have regarding the current facility at Camp Ashraf as a coercive environment. Independent observers have called it a cult," the State Department said. "The UNHCR requires an atmosphere in which people can make their own choice free of group pressure. What's happened in Camp Ashraf has not been conducive to this."

Advocating for the MEK is a tricky proposition for the State Department, because the organization is on its list of foreign terrorist organizations. The MEK has been lobbying hard for its removal from that list and State's review of their status has been "ongoing" for years.

As part of its multi-million dollar lobbying effort, the MEK has paid dozens of top U.S. officials and former officials to speak on its behalf, sometimes at rallies on the State Department's doorstep. MEK supporters have been stationed outside the State Department non-stop for months now, and are even showing up at Congressional hearings.

Their list of advocates, most who have admitted being paid, includes Congressman John Lewis (D-GA), former Pennsylvania Gov. Ed Rendell, former FBI Director Louis Freeh, former Sen. Robert Torricelli, Rep. Patrick Kennedy, former CIA Deputy Director of Clandestine Operations John Sano, former National Security Advisor James Jones, former Vermont Gov. Howard Dean, former New York Mayor Rudolph Giuliani, former Joint Chiefs Chairman Gen. Richard Myers, former White House Chief of Staff Andy Card, Gen. Wesley Clark, former Rep. Lee Hamilton, former CIA Director Porter Goss, senior advisor to the Romney campaign Mitchell Reiss, Gen. Anthony Zinni, former Pennsylvania Gov. Tom Ridge, former Sen. Evan Bayh, and many others.

The State Department officials didn't say outright that these officials are making the challenge of dealing with the MEK worse by shilling for the organization around Washington. But they did call on the MEK's paid representatives to use whatever clout they have to urge the MEK to go along with the relocation now.

"It is important for those advocates to support a solution that is feasible. Because maximalist demands and echoing a kind of martyrdom and complex of defiance and blood will produce the results they fear. Now is the time for everybody who says they want a peaceful solution to back that solution right now," the official said.

But what happens after the MEK moves to the new facility, even if the current deal is worked out in time? What's the plan to deal with these people over the long run?

"Right now our priority is in a successful, peaceful relocation," the State Department official said. "One huge problem at a time."

UPDATE: The AP reported has just reported that Iraqi Prime Minister Nouri al-Maliki has decided to grant a 6-month extenstion on the closing of Camp Ashraf, although he is backdating the start of the extension to November. 

House and Senate leaders are meeting this week behind closed doors to work out language for new sanctions on the Central Bank of Iran (CBI), and the administration is  pressing key Democrats hard to adopt their position, which aims to weaken the sanctions measures.

The debate is taking place as part of the negotiations over the fiscal 2012 defense authorization bill, which passed both the House and the Senate and is in conference right now. The legislation will probably emerge from conference next week and pass both chambers, at which point President Barack Obama will be under heavy pressure to sign the "must pass" defense bill, with whatever Iran sanctions language the conferees agree on.

The current sanctions language at the center of the closed door debate is the amendment by Sens. Mark Kirk (R-IL) and Robert Menendez (D-NJ), which passed the Senate by a rare 100-0 vote over the very public objections of top Obama administration officials. The amendment would direct the Obama administration to take punitive measures against foreign banks that do business with the CBI, but gives the administration more leeway to implement the sanctions than Kirk's original language.

The administration urged Kirk and Menendez to come up with a compromise amendment but then came out against that very compromise last week, angering and alienating Menendez, who needs to be tough on the issue ahead of his re-election bid next year. The Cable has obtained the administration's private communications to the conferees spelling out the changes they want to the Kirk-Menendez amendment; they can be found here and here.

Basically, the administration wants to delay the implementation of sanctions not related to oil purchases from 60 to 180 days, and wants to water down the severity of sanctions measures if and when they are put into effect.

Initially, the administration turned to House Foreign Affairs Committee ranking Democrat Howard Berman (D-CA) to help them with the changes. Berman, who is inside the closed conference, initially indicated that he wanted to work with the administration to change the Kirk-Menendez amendment.

But Berman also has a tough reelection fight coming up against Rep. Brad Sherman (D-CA), who he must face after their districts were combined, and he can't afford to seem weak on Iran. Today, Berman announced that he does not want to want to water down the Kirk-Menendez language at all. In fact, he said he wants to strengthen it.

"Every administration wants total discretion on foreign policy, but that is an impulse that Congress must always resist," Berman said at a conference on Thursday sponsored by the Foundation for the Defense of Democracies (FDD), a conservative policy and research organization. Berman spoke just after a panel on Syria, moderated by your humble Cable guy.

"I will not, and Congress should not, give into entreaties from the administration or elsewhere ... to dilute our approach to sanctions on the Central Bank of Iran's petroleum transactions," Berman said to applause. "The Kirk-Menendez amendment is a good amendment."

Berman said the only change he wants to the Kirk-Menendez amendment is to shorten the administration's window for implementing sanctions on those who do oil business with the CBI from 180 days, as the Kirk-Menendez bill specifies, to 120 days.

Sherman, in a Thursday interview with The Cable, accused Berman of flip-flopping on the issue and said the Kirk-Menendez language should be sent to Obama's desk exactly as it is.

"Berman was helping the administration and now he's made a 180 degree change, which is good," Sherman said.

"We need to protect the Menendez-Kirk language," he said, making sure to name the Democrat first. "The White House doesn't want to do it. And the White House will be trying to stop the Menendez-Kirk amendment from being in legislation that the president has to sign."

Having lost Berman, the administration then turned to other senior Democrats to carry its water inside the conference. We're told by a senior GOP congressional aide close to the conference negotiations that House Armed Services ranking Democrat Adam Smith (D-WA) and Senate Armed Services Committee Chairman Carl Levin (D-MI) are now arguing inside the conference for changes to the Kirk-Menendez amendment to satisfy the administration's concerns.

"Right now the Republicans want to adopt the Menendez/Kirk amendment while the Democrats, specifically Congressman Smith and Senator Levin, are working to incorporate the Obama administration's changes even though Senator Levin already voted for the current language," the aide said. "At some point enough is enough - Let's send it to the President's desk for signature as it is."

The administration has argued publicly that the Kirk-Menendez amendment could alienate foreign countries, make it more difficult to form an international coalition to pressure Iran, and raise oil prices, which could actually help the Iranian economy. They have argued in private meetings with lawmakers that the effort could hurt the U.S. economy.

Supporters of the Kirk-Menendez amendment point to an extensive report on CBI sanctions compiled in the midst of the negotiations by the FDD.  

"The (once) confidential report was provided to the administration and select members of Congress during the discussions on the Menendez-Kirk Central Bank amendment," FDD's Mark Dubowitz told The Cable. "The report concluded that, even if the Saudis did not release additional oil supplies, it was still possible to reduce Iran's oil revenues without spooking oil markets and driving up the price of oil."

Sherman's view on that tension is shared by most lawmakers. "You can't stop Iran from getting a nuclear weapon without breaking some eggs," he said.

A team of conservative policymakers and thinkers believes that there's a real chance that Western efforts to stop Iran from acquiring a nuclear weapon will fail, in which case the United States would have to lead an international effort to contain Iran and deter the Islamic Republic from using its nuclear weapons capability.

Experts at the American Enterprise Institute (AEI), a conservative Washington think tank, have spent the last six months thinking about how the United States should respond to a nuclear-armed Iran. They are getting ready to release an extensive report tomorrow detailing a comprehensive strategy for dealing with that scenario, entitled, "Containing and Deterring a Nuclear Iran."

"The report is very much an acknowledgement of the very real possibility of failure of the strategy to prevent Iran from obtaining a nuclear weapon, and any responsible party should recognize that failure is an option. There's been a huge disservice done by all who have spent their lives in denial of that possibility," AEI Vice President Danielle Pletka told The Cable in a Monday interview. "Whenever you devise a strategy for what happens before a country gets a nuclear weapon, you should have a strategy for what happens after they get one as well."

Pletka will unveil the report on Tuesday morning at an event with Sen. Mark Kirk (R-IL), and fellow AEI experts Tom Donnelly, Maseh Zarif, and Fred Kagan. The project brought together Iran experts of all stripes to brainstorm what would be needed to create the maximum level of confidence that, if Iran does develop a nuclear weapon, it would not decide to use it.

"While there can never be certain deterrence, Cold War presidents often had confidence that the United States had sufficient military power to support a policy of containment through a strategy of deterrence; for most of the period they felt that deterrence was assured," the report states. "It is worth repeating Dean Acheson's basic formulation: ‘American power would be employed in stopping [Soviet aggression and expansion], and if necessary, would inflict on the Soviet Union injury which the Moscow regime would not wish to suffer.' Assured deterrence began with assured destruction of the Soviet regime."

Pletka said that while the geopolitical environment is now different, the basic goal of U.S. policy is the same -- to create a situation whereby Iranian leaders would credibly believe that any nuclear attack would mean the end of their regime. But Pletka doubts whether this administration has the stomach for such a stance.

"Take out Soviet and Moscow from Acheson's quote, and sub in Iran and Tehran. Are we willing to inflict on Iran injury which the Tehran regime would not wish to suffer? I doubt it," Pletka warned. "There's no question that a country can be deterred from using a nuclear weapon, the only question is if there is the will to put those tools in place."

The report works under the assumption that Iran is working to build a nuclear weapon now and could complete one before the 2012 U.S. presidential election, after which it would continue to build nuclear weapons at a rapid pace. The report also assumes that the Obama administration is unwilling to go to war with Iran before November 2012 over the issue, and that even a limited strike by Israel would not achieve a full destruction of Iran's nuclear capabilities.

"Strategically, Iran's leaders would be foolish to wait until after November 2012 to acquire the capability to permanently deter an American attack on their nuclear program," the report states. "Sound American strategy thus requires assuming that Iran will have a weaponized nuclear capability when the next president takes office in January 2013. The Iranians may not test a device before then, depending, perhaps, on the rhetoric of the current president and his possible successor, but we must assume that they will have at least one."

"Make no mistake -- it would be vastly preferable for the United States and the world to find a way to prevent Iran from crossing that threshold, and we wholeheartedly endorse ongoing efforts that might do so," the authors write. "But some of the effort now focused on how to tighten the sanctions screws must shift to the problem of how to deal with the consequences when sanctions fail."

For Donnelly, part of the report's value is that it highlights the high costs of a deterrence and containment strategy compared to the costs of taking stronger actions now to prevent a nuclear-armed Iran.

"Deterrence and containment are the default mode for the people who are not up for going to war, but we wanted to point out that this was not a cheap or easy alternative, which is the way a lot of people make it sound," Donnelly told The Cable in an interview.

At Tuesday's event, Kirk will make the argument that the deterrence and containment strategy are too costly and too uncertain to depend on. His speech will be entitled, "If Iran gets the bomb..."

"Today, the Islamic Republic of Iran is on the march to nuclear weapons.  And if this brutal, terrorist-sponsoring regime achieves its goal -- if Iran gets the bomb -- we, the United States of America and freedom-loving nations around the world, will have failed in what could be our generation's greatest test," Kirk will say, according to excerpts of his speech provided to The Cable.

"Iran remains the leading sponsor of international terrorism -- a proliferator of missiles and nuclear materials -- a regional aggressor -- and an abuser of human rights. We cannot afford to risk the security of future generations on a policy of containment."

Senate Democrats and Republicans have agreed on a way forward regarding new sanctions on the Central Bank of Iran (CBI) that would impose crippling sanctions on the Iranian economy, with an eye toward preventing a catastrophic consequence for the world oil markets.

Last night, Sens. Mark Kirk (R-IL) and Robert Menendez (D-NJ) filed a new amendment to the defense policy bill that represents a compromise of the two separate amendments each had filed last week. The new bipartisan language would build upon the administration's announcement last week that it was naming the CBI as a  "primary money laundering concern"  under the Patriot Act and go further than President Barack Obama's Nov. 19 executive order expanding sanctions on Iran's petroleum sector. The Senate amendment would add to that by barring any U.S. financial institution from doing business with any foreign financial institution that knowingly conducted any significant financial transaction with the CBI.

The Kirk-Menendez amendment got unanimous consent in the Senate on Monday for consideration on the defense bill, which is on the floor this week. It will get a vote, probably before Dec. 2, and is expected to pass overwhelmingly. The administration has resisted any congressional efforts to force the imposition of Iran sanctions ahead of its own schedule, but Obama will be hard pressed to veto the must-pass defense bill over the issue.

"The amendment is hard-hitting, responsible and, most importantly, completely bipartisan.  It'll have an enormous impact on the Iranian economy without hurting our own while providing the administration additional diplomatic leverage," a GOP Senate aide told The Cable today. "Last week the administration told the world that the Central Bank of Iran was a terrorist bank; I think they'd have to agree this amendment is an appropriate way of dealing with a terrorist bank."

The main concern with Kirk's original amendment was that it would have forced measures against central banks in other countries that do oil business with the CBI. The compromise language softens that requirement by giving a six-month grace period for petroleum-related sanctions to go into effect. And after six months, the penalties against central banks in other countries could be waived by the president for another six months if the Energy Information Agency reports there's not enough non-Iranian oil supply in the market, or if specific countries are showing strong efforts to move away from Iranian oil purchases.

The amendment would also require the president to initiate a "multilateral diplomacy initiative" aimed at convincing other countries to stop purchasing oil from Iran.

Read a best-guess timeline of the implementation of the Kirk-Menendez sanctions, compiled as a memo by Hill aides and given to The Cable, after the jump:

Read on

The Obama administration reacted cautiously to today's International Atomic Energy Agency report on Iran's nuclear weapons program and declined to say how exactly how they would respond. But across Washington, suggestions for tightening the noose on the Iranian regime were abundant.

"I'm definitely going to tell you we need time to study it," State Department spokeswoman Victoria Nuland told reporters on Tuesday following the release of the IAEA report, which alleges that Iran had until 2003 an intricate and extensive program to design and build a nuclear warhead to fit atop a Shabaab-3 missile. The report also stated that Iran worked on components for such a warhead, prepared for nuclear tests, and maintained aspects of the program well past 2003 -- activities that may still be ongoing today.

"I think you know the process here: that after a report like this comes out, we also have a scheduled meeting of the IAEA Board of Governors coming up on November 18th, so Iran will be an agenda item at that meeting. So we will take the time between now and then to study this," Nuland said.

In a conference call with reporters on Tuesday afternoon, two senior administration officials predicted that the Obama administration would increase sanctions on Iran in light of the report but declined to offer any specifics on what they might be.

That explanation wasn't well received by lawmakers in both parties on Tuesday, who offered plenty of specific ideas on how to ramp up pressure on Tehran and have no intention of waiting for the administration to "study" the IAEA's findings.

The Cable spoke on Tuesday with Sens. John Kerry (D-MA), Mark Kirk (R-IL), John McCain (R-AZ), and Lindsey Graham (R-SC) about the report.

"It's of enormous concern to everybody and a lot of conversations are taking place right now about how to respond," Kerry told The Cable. "It clearly means we have to ratchet up on Iran, probably tougher sanctions and other things."

Kerry declined to endorse one big idea floating around town, namely to take actions that would collapse the Central Bank of Iran (CBI) and ruin the country's currency, bringing the Iranian economy to its knees.

"There are a lot of options, you want to pick them carefully and you want to be thoughtful about what's going to be effective," Kerry said.

Kirk, who co-authored a letter in August with Sen. Chuck Schumer (D-NY) calling for collapsing the CBI, and which was signed by 92 senators, tweeted today that the White House's reaction to the report Tuesday constituted "national security malpractice."

Kirk met with White House Chief of Staff Bill Daley on Monday night to give him the "hard sell" on the idea of collapsing the CBI, he told The Cable. Kirk said that the concept under consideration is to give friendly countries that are dependent on Iranian oil -- such as Japan, South Korea, and Turkey -- a time window to shift their purchases from Iran to Saudi Arabia.

Kirk and Schumer are planning to introduce a bill soon that would be a Senate companion to an amendment by Rep. Howard Berman (D-CA) to require the president to determine within 30 days the CBI's role in Iran's illicit activities. If the president determines that the CBI is complicit, the bill would require the administration to cut off any foreign banks doing business with the CBI from participating in the U.S. financial system.

The main risk in collapsing the CBI is that it could bring down the Iranian oil industry along with it, risking a cascading effect on world energy markets that would exacerbate the global economic crisis.

McCain told The Cable today that it's a risk he is willing to take. "Libya is cranking up their oil exports. There's always risk, but there's a greater risk when you know that they're about to become nuclear weaponized," he said.

"The first thing we should do is talk to the Russians and the Chinese and tell them to get with it and pass the increased sanctions through the U.N.," McCain said, adding that the Obama has leverage against Russian and China if it chooses to use it. "Russia wants in the WTO, China wants a lot of things. There should be consequences for their failure to act."

Graham agreed that the negative impact of collapsing the CBI was a necessary cost of ramping up pressure on Iran.

"We've got make a decision: What's the biggest threat to the world, a nuclear-armed Iran or sanctions that would hurt us and the people of Iran?" Graham told The Cable. "You've got two choices, the policy of containment or the policy of preemption. I'm in the preemption camp. I don't think containment works. The only way to stop this is to prevent this and that means changing behavior."

Graham said existing sanctions don't seem to be working, which means that the sanctions regime has to be fundamentally changed. "If that doesn't work, the other option is military force." But Graham cautioned that if there were to be a military strike on Iran, it would have to include a massive assault on Iran's counterattacking capabilities.

"You'd have to destroy their air force, sink their navy, and deal with their long-range missile threat. So you'd have to go in big," he said. "If you attack Iran you open Pandora's box. If you allow Iran to get a nuclear weapon, you empty Pandora's box. So these are not good choices."

Sen. Joe Lieberman (I-CT) said in a statement that the threat of military force must be credible and he called for Congress to pass a new Iran sanctions bill, one that the administration previously said was unnecessary.

The House and Senate have each unveiled a version of the bill that would tighten existing sanctions, compel the administration to enforce penalties already on the books, and levy a host of new restrictions against members of Iran's regime and companies that aid Iran's energy, banking, and 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.

Former Treasury Department official Matthew Levitt, now a senior fellow at the Washington Institute for Near East Policy, told The Cable that there's no consensus yet inside the administration or around the world that collapsing the CBI would be possible without doing severe damage to the world economy.

But Levitt offered several things the administration can do immediately to ramp up pressure on Iran, including pressuring countries to scale back Iranian diplomatic presence in their capitals, restricting the travel of Iranian officials around the world, and setting up a multilateral customs body to enforce sanctions against Iran, modeled after what was done in wake of the Kosovo crisis.

"The administration is not being creative enough with the tools they have," Levitt said. In the coming days, he predicted, "You are going to see scrambling as to what can be done."

The Obama administration is claiming it always intended to withdraw all U.S. troops from Iraq by the end of this year, in line with the president's announcement today, but in fact several parts of the administration appeared to try hard to negotiate a deal for thousands of troops to remain -- and failed.

"I can report that as promised, the rest of our troops in Iraq will come home by the end of the year. After nearly nine years, America's war in Iraq will be over," President Barack Obama said today, after speaking with Iraqi Prime Minister Nouri al-Maliki. "The last American soldier will cross the border out of Iraq with their held -- heads held high, proud of their success, and knowing that the American people stand united in our support for our troops. That is how America's military efforts in Iraq will end."

Deputy National Security Advisors Denis McDonough and Tony Blinken said in a White House briefing that this was always the plan.

"What we were looking for was an Iraq that was secure, stable, and self reliant, and that's what we got here, so there's no question that was a success," said McDonough, who traveled to Iraq last week.

But what about the extensive negotiations the administration has been engaged in for months, regarding U.S. offers to leave thousands of uniformed soldiers in Iraq past the deadline? It has been well reported that those negotiations, led by U.S. Ambassador James Jeffrey, Army Gen. Lloyd Austin, the top U.S. commander in Iraq, and White House official Brett McGurk, had been stalled over the U.S. demand that the remaining troops receive immunity from Iraqi courts.

"What the president preferred was for the best relationship for the United States and Iraq going forward. That's exactly what we have now," McDonough said, barely acknowledging the administration's intensive negotiations.

"We talked about immunities, there's no question about that.... But the bottom line is that the decision you heard the president talk about today is reflective of his view and the prime minister's view of the kind of relationship we want to have going forward. That relationship is a normal relationship," he said.

Of course, the U.S.-Iraqi relationship is anything but normal. Following nine years of war, the death of over 4,000 Americans and perhaps hundreds of thousands of Iraqis, and the disbursement of at least hundreds of billions of dollars of American taxpayer' money, the United States now stands to have significantly less influence in Iraq than if the administration had been able to come to terms with Iraq over a troop extension, according to experts and officials.

"Iraq is not a normal country, the security environment is not normal, the embassy is not a normal embassy," said Marisa Cochrane Sullivan, managing director at the Institute for the Study of War, who traveled to Iraq this summer and has been sounding the alarm about what she saw as the mishandling of the negotiations ever since.

For more evidence that the administration actually wanted to extend the troop presence in Iraq, despite today's words by Obama and McDonough, one only has to look at the statements of Defense Secretary Leon Panetta.

In July, Panetta urged Iraqi leaders to, "Dammit, make a decision" about the U.S. troop extension. In August, he told reporters that, "My view is that they finally did say, ‘Yes.'" On Oct. 17, he was still pushing for the extension and said, "At the present time I'm not discouraged because we're still in negotiations with the Iraqis."

Sullivan was one of 40 conservative foreign policy professionals who wrote to Obama in September to warn that even a residual force of 4,000 troops would "leave the country more vulnerable to internal and external threats, thus imperiling the hard-fought gains in security and governance made in recent years at significant cost to the United States."

She said that the administration's negotiating strategy was flawed for a number of reasons: it failed to take into account Iraqi politics, failed to reach out to a broad enough group of Iraqi political leaders, and sent contradictory messages on the troop extension throughout the process.

"From the beginning, the talks unfolded in a way where they largely driven by domestic political concerns, both in Washington and Baghdad. Both sides let politics drive the process, rather than security concerns," said Sullivan.

As recently as August, Maliki's office was discussing allowing 8,000 to 20,000 U.S. troops to remain until next year, Iraqi Ambassador Samir Sumaida'ie said in an interview with The Cable. He told us that there was widespread support in Iraq for such an extension, but the Obama administration was demanding that immunity for U.S. troops be endorsed by the Iraqi Council of Representatives, which was never really possible.

Administration sources and Hill staffers also tell The Cable that the demand that the troop immunity go through the Council of Representatives was a decision made by the State Department lawyers and there were other options available to the administration, such as putting the remaining troops on the embassy's diplomatic rolls, which would automatically give them immunity.

"An obvious fix for troop immunity is to put them all on the diplomatic list; that's done by notification to the Iraqi foreign ministry," said one former senior Hill staffer. "If State says that this requires a treaty or a specific agreement by the Iraqi parliament as opposed to a statement by the Iraqi foreign ministry, it has its head up its ass."

The main Iraqi opposition party Iraqiya, led by former U.S. ally and former Prime Minister Ayad Allawi, decided to tie that vote to two non-related issues. It said they would not vote for the troop extension unless Maliki agreed give them control of a high-level policy council and let them choose the minister of defense from their ranks. Maliki wasn't about to do either.

"It was clear from the beginning that Maliki wasn't going to make a move without the support of the other parties behind him," Sullivan explained, adding that the Obama administration focused on Maliki and neglected other actors, such as Allawi. "There was a misunderstanding of how negotiations were unfolding in Iraq. The negotiations got started in earnest far too late."

"The actions don't match the words here," said Sullivan. "It's in the administration's interest to make this look not like they failed to reach an agreement and that they fulfilled a campaign promise. But it was very clear that Panetta and [former Defense Secretary Robert] Gates wanted an agreement."

So what's the consequence of the failed negotiations? One consequence could be a security vacuum in Iraq that will be filled by Iran.

"It's particularly troubling because having some sort of presence there would have really facilitated our policy vis-a-vis the Iranians and what's going on in Syria. The Iranian influence is going up in Iraq," said Andrew Tabler, senior fellow at the Washington Institute for Near East Policy. "It makes it harder for us to play our cards, and that's a real setback. We've spent a lot of blood and treasure in Iraq. And these days, stability in that region is not what it used to be."

House Armed Services Committee Chairman Buck McKeon (R-CA) echoed those sentiments in a statement today and expressed skepticism that Iraq is as "safe, stable, and self reliant" as the White House claims.

"Multiple experts have testified before my committee that the Iraqis still lack important capacities in their ability to maintain their internal stability and territorial integrity," McKeon said. "These shortcomings could reverse the decade of hard work and sacrifice both countries have endured to build a free Iraq."

Senate Foreign Relations Committee chairman John Kerry (D-MA), in his own Friday statement, backed up the administration's argument that the lack of a troop extension was in the best interest of the United States and Iraq.

"The United States is fulfilling our agreement with an Iraqi government that wants to shape its own future," he said. "The President is also following through on his commitment to end both the conflict in Iraq and our military presence... These moves appropriately reflect the changes on the ground. American troops in Iraq will be coming home, having served with honor and enormous skill."

UPDATE: This article was amended after a White House official called in to say that it was not the "White House" that was pushing for an extension of U.S. troops. 

"The White House has always seen the president's pledge to get all troops out of Iraq as a core commitment, period," the White House official said.

The Treasury Department sanctioned the Iranian commercial airline Mahan Air as part of the U.S. government response to the alleged Iranian-backed assassination plot on the Saudi ambassador to Washington.

Treasury announced in a press release early on Wednesday that Mahan Air would be sanctioned due to its financial, material, and technological support to the Islamic Revolutionary Guard Corps-Quds Force (IRGC-QF). On Tuesday, Treasury announced sanctions on four IRGC-QF officials who it alleges were involved in the plot to hire a Mexican cartel to bomb a Washington restaurant in order to kill Saudi Ambassador Adel bin Ahmed Al-Jubeir.

"Mahan Air's close coordination with the IRGC-QF -- secretly ferrying operatives, weapons and funds on its flights -- reveals yet another facet of the IRGC's extensive infiltration of Iran's commercial sector to facilitate its support for terrorism," said Treasury Undersecretary for Terrorism and Financial Intelligence David Cohen, in a statement. "Following the revelation about the IRGC-QF's use of the international financial system to fund its murder-for-hire plot, today's action highlights further the undeniable risks of doing business with Iran."

The new sanctions make it illegal for any Americans to do business with Mahan Air and freeze the airline's assets in the United States. The airline also provides assistance to the Iranian-backed terrorist group Hezbollah, the Treasury Department alleged.

Further retaliatory measures from the U.S. government are expected. The State Department has been reaching out to several countries to explore options for tightening multilateral sanctions. And lawmakers on both sides of the aisle are demanding tougher measures to punish Iran for its role in the alleged plot. Sen. Mark Kirk (R-IL) is calling for Treasury to sanction the Central Bank of Iran, which he says would collapse the bank and cripple the Iranian currency.

The New York Times reported on Tuesday that, in addition to the plan to kill the Saudi envoy, the Iranian agents -- who were working with a DEA informant they believed was a representative of Mexican drug cartel Los Zetas -- also discussed plans to bomb the Israeli embassy in Washington and the Saudi and Israeli embassies in Argentina.

Attorney General Eric Holder pledged on Tuesday that, "The United States is committed to holding Iran responsible for its actions."

Hundreds of supporters of the Mujahedin-e-Khalq (MEK) movement converged on the State Department on Friday to hear former U.S. congressmen and senior officials call for the U.S. government to take the MEK off its list of foreign terrorist organizations.

Former Rep. Patrick Kennedy (D-RI) emceed the rally in front of the State Department headquarters. The event also featured speeches by former Gov. Ed Rendell (D-PA), former FBI Director Louis Freeh, former CIA Deputy Director of Clandestine Operations John Sano.

"One of the greatest moments was when my uncle, President [John F.] Kennedy, stood in Berlin and uttered the immortal words ‘Ich bin ein Berliner,'" Kennedy exclaimed. "Today, I'm honored to repeat my uncle's words, by saying [translated from Farsi] ‘I am an Iranian,' ‘I am an Ashrafi."

The crowd erupted in cheers and applause and began chanting, "MEK yes, mullahs no! They are terrorists, they must go!"

Kennedy advocated taking the MEK off the terrorist list, which it has been on since 1997, and accused the Iraqi government of committing war crimes by killing innocent members of the MEK at Camp Ashraf. 3,400 MEK members live in the desert camp in Iraq under restrictive conditions.

"To my friends in the State Department behind us, who continue to hold fast to an old policy that is supported by Tehran, you are on the wrong side of history," Kennedy shouted. "To [Iraqi Prime Minister] Nouri al-Maliki, your brutal and deadly assault on Camp Ashraf will land you in the International Criminal Court, where you will be held accountable."

"I love you," Kennedy told the crowd. "If you take the MEK off the list, you will unshackle a group that will help take out the mullahs in Iran."

Next up was Rendell, who called on the international community to militarily intervene in Camp Ashraf, comparing it to Muammar al-Qaddafi's assault on Benghazi earlier this year.

"The international community conducted a military intervention in Libya to protect innocent civilians. We should do the same thing to protect the innocent people in Camp Ashraf," Rendell said.

MEK leader Maryam Rajavi, who lives in Paris with her husband Massoud Rajavi (who hasn't been seen in public since 2003), is banned from traveling to the United States. But she spoke to the rally via a video message on a big screen, and accused the State Department of giving implicit permission to the Iranian and Iraqi governments to kill children.

"The terror listing in the U.S. is openly used as a justification to legitimize such bloodletting, by both the cruel mullahs as well as their proxy government in Iraqi," she said. "Therefore, the Iranian people are asking the United States, ‘Why are you not annulling the license to kill our children?'"

The Cable's informal headcount put the number of attendees at about 1,000 to 1,500, with long lines of young Iranian-Americans wearing shirts with photos of dead MEK members imprinted on them. Some attendees had photos of the Rajavis on their shirts. Add to that flags, confetti, and a full drum line.

We asked Kennedy if he had been paid for his appearance at the rally, but he refused to answer. Ali Safavi, president of a pro-MEK group Near East Policy Research, said the speakers were paid through a speakers bureau, which receives money from wealthy Iranian-Americans in the United States. He also said those Iranian-Americans work with the law firm DLA Piper, but he denied the allegation that DLA and these individuals help funnel money from the MEK to the former U.S. officials.

In a crowd made up of people who were mostly of Middle Eastern origin, a group of African-American attendees wearing MEK gear stood out. One man, who would only identify himself as "The Great Lonnell," was holding a "Delist the MEK" banner while wearing a shirt that said, "Behold the Great Beast."

"We are here representing on behalf of the Iranian community. This vicious dictator who is calling himself a president is murdering these people, he's slaying them, and nothing is getting done," the Great Lonnell said. "And they are here rallying to get the attention of a government that has deaf ears."

The Great Lonnell came to Washington from Staten Island, NY -- along with 200 people from a church he attends -- to support the MEK's struggle for human rights. He and his group have been attending MEK rallies for several months, he said.

The Great Lonnell then pulled your humble Cable guy aside and asked to pitch Foreign Policy another story.

"Do you want to write my own story?" he asked. "I am the Beast that will come to the earth, from Revelations in the Old Testament. I am that person."

The Cable was not able to confirm that The Great Lonnell was in fact the Beast from Revelations.

UPDATE: Zaid Jilani and Ali Gharib from ThinkProgress interviewed attendees at the rally, many who had tenuous if any links to the MEK and little understanding of why there were there. Many had traveled from far away on fully funded trips.  Some appeared to be homeless. Watch the video here:

This week's toppling of the Qaddafi regime in Libya shows that the Obama administration's multilateral and light-footprint approach to regime change is more effective than the troop-heavy occupation-style approach used by the George W. Bush administration in Iraq and Afghanistan, a top White House official told Foreign Policy today in a wide-ranging interview.

"The fact that it is Libyans marching into Tripoli not only provides a basis of legitimacy for this but also will provide contrast to situations when the foreign government is the occupier," said Ben Rhodes, deputy national security advisor for communications, in an exclusive interview on Wednesday with FP. "While there will be huge challenges ahead, one of the positive aspects here is that the Libyans are the ones who are undertaking the regime change and the ones leading the transition."

Despite criticism from Congress and elsewhere, President Barack Obama's strategy for the military intervention in Libya will not only result in a better outcome in Libya but also will form the basis of Obama's preferred model for any future military interventions, Rhodes said.

"There are two principles that the president stressed at the outset [of the Libya intervention] that have borne out in our approach. The first is that we believe that it's far more legitimate and effective for regime change to be pursued by an indigenous political movement than by the United States or foreign powers," said Rhodes. "Secondly, we put an emphasis on burden sharing, so that the U.S. wasn't bearing the brunt of the burden and so that you had not just international support for the effort, but also meaningful international contributions."

Rhodes said that the United States is not going to be able to replicate the exact same approach to intervention in other countries, but identified the two core principles of relying on indigenous forces and burden sharing as "characteristics of how the president approaches foreign policy and military intervention."

Rhodes also weighed in on several other aspects of the Libya saga:

• Rhodes confirmed the comments by U.S. Ambassador to the United Nations Susan Rice on Tuesday that the TNC can choose whether to prosecute Muammar al-Qaddafi themselves or hand him over to the International Criminal Court, which has indicted him on war crimes. ICC prosecutor Luis Moreno-Ocampo, however, has argued that the decision is not up to the Libyans.
• "We believe it's something that the Libyans and the [Transitional National Coalition], were they to capture Qaddafi, would then be in charge of, in consultation with the ICC," said Rhodes. "Were he to go to any third country, they would have an obligation to turn him over to the ICC."
• On the role of the NATO operation in Libya, Rhodes said the civilian protection mission continues but that consultation will soon begin in Brussels on the conclusion of the mission. The need for the NATO protection mission is still present for now, Rhodes said, but the White House doesn't anticipate the TNC requesting a peacekeeping force from NATO or the United Nations that involves any foreign boots on the ground. "There's no plan for that type of effort," he said.
• Rhodes said the drive to release between $1 billion and $1.5 billion of Qaddafi's frozen assets to the TNC is moving along quickly. "We think that should be complete in the next few days and we don't foresee an insurmountable problem there," he said. The Obama administration feels confident the TNC can manage the money and prevent it from being stolen or funneled to unsavory actors. The administration will also try to ensure the money goes to the urgent needs identified by the TNC.
• Rhodes also addressed the effects the developments in Libya may have on Syria, saying that "it sends a message to Damascus that a crackdown of the sort that Qaddafi and [Syrian President Bashar al-] Assad have pursued is not a means of maintaining legitimacy and staying in power in the long run."
• Rhodes said that a transition to democracy in Syria is in the U.S. national interest, and would weaken Iran's ability to influence regional events. "The Iranians have suggested that the Arab Spring was somehow a positive development for Tehran, the fact you see their principal ally in the region having completely lost legitimacy... would be a blow to Iran," he said. But he emphasized that the administration does not see a military intervention in Syria as the right step.
• On the fate of Lockerbie bomber Abdelbaset Mohmed Ali al-Megrahi, who senior lawmakers and GOP presidential candidates said on Tuesday should be re-arrested and extradited to the United States, Rhodes said the extradition issue was a legal question for the Justice Department, "but the president never thought he should have been released in the first place ... so that continues to be our view."

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."

One day after the Senate unveiled its wide ranging new Iran sanctions legislation and on the same day 10,000 AIPAC supporters are on the Hill, the Obama administration announced it would enforce penalties on seven companies doing business with Iran.

Outgoing Deputy Secretary of State Jim Steinberg briefed the press on Tuesday on the administration's move to sanction seven companies under the Comprehensive Iran Sanctions, Accountability, and Divestment Act (CISADA), passed and signed into law last July. For those keeping count, that's a total of nine sanctioned firms since the law has been in place. The companies are: Petrochemical Commercial Company International (PCCI), UK and Iran; Royal Oyster Group, UAE; Speedy Ship, UAE, Iran; Tanker Pacific, Singapore; Ofer Brothers Group, Israel; Associated Shipbroking, Monaco; and Petroleos de Venezuela, sometimes known as PDVSA, in Venezuela.

All of the companies have been involved in the supply of refined petroleum products to Iran, Steinberg said.

"In its struggle to secure the resources it needs for its energy sector, Iran repeatedly has resorted to deceptive practices to evade sanctions... Today's actions add further pressure on Iran to comply with its international obligations," he said. "By imposing these sanctions, we're sending a clear message to companies around the world: Those who continue to irresponsibly support Iran's energy sector or help facilitate Iran's efforts to evade U.S. sanctions will face significant consequences."

Not all the companies were sanctioned in all the same way. For example, PDVSA will no longer have access to U.S. government contracts and U.S. Export-Import Bank financing and technology licenses, but the company can still sell oil to the United States and their subsidiaries are exempt from the sanctions.

Many in Congress are increasingly unhappy with the Obama administration for failing to enforce penalties on companies from countries who are not part of the sanctions team that do business with Iran. CISADA directs the administration to punish all these companies. Last October, the Government Accountability Office (GAO) released a report that identified 16 companies as having sold petroleum products to Iran between Jan. 1, 2009, and June 30, 2010. Of those 16, the GAO reported that five have shown no signs of curtailing business with Iran. Three of those companies are based in China.

But no Chinese companies have been sanctioned by the Obama administration to date for aiding Iran's energy sector.

"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 Monday at the AIPAC conference.

Steinberg also noted that the administration has separately decided to impose sactions on 16 more foreign firms and individuals for their misbehavior on missile programs or WMD under the Iran, North Korea, and Syria Nonproliferation Act (INKSNA), three of which are from China.

Initial reaction to the administration's Tuesday announcement was mixed, with some praise and some skepticism that the new sanctions won't go far enough to transform the intent of the legislation into results.

"This sanction is a good first step and shows the importance of deeds, not only words. This step should send ripples of fear throughout the energy sector that Iran sanctions will be enforced," said Mark Dubowitz, executive director and head of the Iran Energy Program at the Foundation for the Defense of Democracies.

But multiple Senate aides told The Cable that they would continue to press the administration to enforce energy industry sanctions against third-party countries such as China and Russia.

"The question is, how does this appear to the international community? Do they look at these sanctions and say that the Americans aren't serious about stopping what's going on in the market? Sadly, I think the answer is yes," said one senior GOP Senate aide.

"It's always good when they sanction somebody, but the devil is in the details."