Press Release

Gillibrand Announces Senate Passage Of Tough New Sanctions Against Iran

Jun 24, 2010

Washington, DC – U.S. Senator Kirsten Gillibrand, a member of the Senate Foreign Relations Committee, today announced Senate passage of new legislation that allows President Obama to block contracts for companies that do business with Iran and enforce tough penalties against any companies that falsely claim they do not conduct business with Iran’s energy sector. The legislation, which was passed by a vote of 99 to 0, will also place tough sanctions against the sale of gasoline to Iran and shuts off foreign banks that conduct businesses with Iranian military and other entities.  Senator Gillibrand repeatedly called on Congress to move forward on this legislation as an important tool for tougher, crippling sanctions against Iran. 

“We are sending a clear message to Iran and companies that do business with Iran that the status quo will not be tolerated. We must show Iran that until they halt their nuclear development, they will not have any access to the global economy, and neither will any company doing business with Iran,” Senator Gillibrand said. “Doing business with Iran funds the development of nuclear weapons that pose an imminent threat to America, Israel, and all of our allies. I am pleased with the action we took today to make sure no company will be allowed to put their profits before our safety.”

After a recent New York Times analysis revealed that companies that do business with Iran’s energy sector defied U.S. sanctions law by raking in tens of billions of dollars in federal contracts and loans, Senator Gillibrand called for immediate passage of federal law that would allow President Obama to impose tougher sanctions and checks against companies tied to Iran, including blocking federal contracts to violators and imposing a three year ban on government contracts against companies who falsely claim they do not conduct business with Iran.

In her March letter to Majority Leader Reid, Senator Gillibrand called for immediate action to move both the Senate and House versions of the Iran sanctions bill through conference committee and onto the President’s desk. Senator Gillibrand urged Majority Leader Reid to encourage colleagues in conference to adopt the stronger House bill which prohibits government contracts to foreign companies and foreign subsidiaries of American companies that do business with Iran and requires firms to officially certify that they do not invest in Iran. Under the House bill, the federal government would impose a three year ban on government contracts against companies who falsely certify, deny companies U.S. bank loans, and restrict violators from importing goods. The conference committee adopted this tougher language.

A New York Times report revealed that $107.8 billion in federal contracts, grants and loans were awarded to companies who were doing business with Iran – $14.8 billion of which were given to companies whose investments in Iran’s energy sector violated the Iran Sanctions Act. According to the report, there were 49 companies that continued to do business with Iran.   

Last year, Senator Gillibrand pushed for legislation to be included in the Iran sanctions bill which targets companies that support Iran’s economy and authorizes stronger penalties against these firms.

The full text of Senator Gillibrand’s letter to Majority Leader Reid is below:

The Honorable Harry Reid
Majority Leader
United States Senate
522 Hart Senate Office Building
Washington, DC 20510

Dear Leader Reid,

I am very troubled by the report in the Sunday edition of the New York Times that the federal government has awarded more than $107 billion in contract benefits over the past decade to companies doing business in Iran, including nearly $15 billion paid to companies that apparently violated U.S. sanctions by making large investments that helped Iran develop its oil and gas reserves. 

The Senate and House have passed companion measures that would significantly increase sanctions on companies helping Iran develop its refined petroleum sector, S. 2799 and H.R. 2194.  Specifically addressing the astounding revelations in the newspaper, these bills would prohibit U.S. government contracts with persons or companies that violate the investment and sale activity covered by these bills.  We must move these bills to conference right away to demonstrate our resolve and provide the President with a more robust set of tools to address Iran’s nuclear threat.  Once in conference, I would request that you instruct conferees to use the House approach to the prohibition of government contracts.  It appears to me to be the stronger of the two, given that it requires a contract applicant to certify that it does not conduct prohibited activity and provides for a three-year ban on government contracts for making a false certification. 

With its nuclear weapons program, Iran poses an existential threat to our close allies such as Israel.  Yet, Iran’s government has defied the international community’s repeated offers to address the country’s energy needs in return for giving up efforts to build a nuclear bomb.  President Obama has made remarkable strides toward advancing international consensus regarding Iran.  But it is time to bolster engagement with sanctions that make an impact on Iran’s decision makers. And, it is certainly time to send a strong message to companies that do business with Iran’s rulers – they must choose between doing business with a rogue state and the U.S. government.

Thank you for your leadership in passing S.2799.  I hope we have the opportunity to vote on a final bill in the near future.