Press Release

Gillibrand: Feds Must Cut Ties With Companies Doing Business With Iran

Mar 8, 2010

Washington, DC – After a recent 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, U.S. Senator Kirsten Gillibrand, a member of the Senate Foreign Relations Committee, 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 that falsely claim they do not conduct business with Iran’s refined petroleum sector.

Senator Gillibrand, “We need to send a strong, clear signal to Iran that until it halts its nuclear ambitions, the dangerous state will be denied the benefits of access to the global economy. Company offenders whose profits serve to fuel Iran’s nuclear ambitions should not be allowed to do business with the U.S.— period. Taking a tougher stance against companies tied to Iran’s refined petroleum capacity would provide the President with a more robust set of tools to address Iran’s existential threat to our nation and our allies.”

In a letter to Senate Majority Leader Harry Reid, 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 provisions, which prohibit government contracts to foreign companies and foreign subsidiaries of American companies that provide Iran with refined petroleum or help it maintain and expand its domestic production.  The House version also requires firms to officially certify that they do not violate U.S. sanctions. While both bills provide a broad set of sanctions, such as denying companies U.S. bank loans and restricting imports from Iran, the House bill would require the federal government to impose a strict three year ban on government contracts for companies who provide false certification.

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 are currently 49 companies that continue to do business with Iran.  

Last year, Senator Gillibrand co-sponsored legislation that was included in the Iran sanctions bill, which would target companies that support Iran’s refined petroleum capacity, a sector that funds Iran’s nuclear military ambitions.

The full text of the letter 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.