Jon Kyl

Mr. KYL

Mr. KYL. Mr. President, until Senator McCain arrives, let me briefly describe these three amendments. Amendment No. 630 requires a report on countersmuggling efforts in Gaza. Within 90 days of the enactment of the Act, the Secretary of State, in consultation with the Director of National Intelligence, shall submit a report to Congress on whether additional funds from our military foreign financing assistance, provided annually to the Government of Egypt, could be expended, No. 1, to improve efforts by the Government of Egypt to counter illicit smuggling, including arms smuggling across Egypt and the Gaza border, and No. 2, to intercept weapons originating in other countries in the region and smuggled into Gaza through Egypt. This amendment requires a report to ensure the Egyptian Government can be even more effective in dealing with this difficult problem. Amendment No. 629 is a prohibition on the use of funds in this bill for resettlement into the United States of Palestinians from Gaza. There has been a suggestion that perhaps that might be permitted, and we simply want to make it clear that will not be permitted with any funds in this bill. Finally, related to Gaza reconstruction, amendment No. 631 provides that none of the funds available in this bill may be made available to aid reconstruction efforts in Gaza until the Secretary of State certifies that none of such funds will be diverted to Hamas or entities controlled by Hamas. The reason for that, of course, is that in providing money to people in Gaza, it is very difficult to ensure that money doesn't go to terrorists, and we want the Secretary of State to ensure that doesn't happen. That is what this amendment would provide. Mr. President, that is the explanation of these three amendments, and I now yield to my colleague from the State of Arizona, Senator McCain.

Mr. KYL

Mr. KYL. The following Senators are necessarily absent: the Senator from Nebraska (Mr. Johanns) and the Senator from Alabama (Mr. Sessions).

Mr. KYL. I am happy to yield to my colleague from Massachusetts for a question.

Mr. KYL. The following Senators are necessarily absent: the Senator from Nebraska (Mr. Johanns) and the Senator from Alabama (Mr. Sessions).

Mr. KYL. The following Senators are necessarily absent: the Senator from Nebraska (Mr. Johanns) and the Senator from Alabama (Mr. Sessions).

Mr. KYL. The following Senators are necessarily absent: the Senator from Nebraska (Mr. Johanns) and the Senator from Alabama (Mr. Sessions).

Mr. KYL. The following Senators are necessarily absent: the Senator from Nebraska (Mr. Johanns) and the Senator from Alabama (Mr. Sessions).

Mr. KYL. Mr. President, if my colleagues on the other side are willing, I am willing to cut this time in half. My amendment is actually very simple. If my colleagues would give me a moment to explain, all this amendment says is that none of the money that is spent in this bill can go to companies that are helping Iran; that is to say, they are doing business with Iran in the export or import business. In the campaign, the President noted that the kind of sanction we need to impose is on the companies, for example, that are providing refined gasoline to Iran. One of the first reports to the President by nonproliferation expert, David Albright, said: At a first step, the Obama administration should ask all of Iran's gasoline suppliers to stop their sales to Iran, followed by an initiative to seek agreement among supplier nations not to provide Iran gasoline. The President has all of the authorities he needs to engage in this. The one thing that Congress can do that we have not done yet is with the power of the purse; that is, to make sure none of the money in the omnibus bill would go to any of the companies that are doing business with Iran. One quick example of why it is necessary: Senator Lieberman and I sent a letter to the Eximbank. Eximbank gets money. That money can go to companies. Once they got the letter, those companies stopped sending refined gas to Iran. I don't know if that is because of our letter. That is the kind of stuff we need to stop with this amendment. I hope my colleagues agree we do not need to send this money to companies that do business with Iran.

Mr. KYL. Mr. President, actually, I am not proposing a new regime of sanctions or anything that needs to be studied. My amendment simply goes to this Omnibus appropriations bill and says what I think all of us intend, which is none of the money shall be spent or shall go to companies that are doing this kind of business with Iran, the kind of business that is already subject to sanctions. That is already the law. All we are saying is, nothing in this bill can get money to those companies. It is the kind of thing we had to do with the Eximbank because as they, in their letter back to us said, we do not allow political considerations to determine whether we make a loan to a country. That is why they were able to make the loan to Iran and why we could do nothing to stop that. Once we wrote the letter, however, and pointed out this was a violation of our sanctions, then mysteriously, the effort of the company ceased. All we want to make sure is that nothing in this bill, none of the money in this particular bill goes to those companies. So it is not a new sanctions regime or anything new that I think has to be studied. With all due respect, this is not for political showmanship. Had this bill gone through a little different process, we could have worked this out. But under the circumstances, that wasn't possible. As a result, I thought it was important to make sure none of the money in this bill is spent on these companies.

Mr. KYL. I would be happy to yield.

Mr. KYL. Given the fact that I think my remaining 2 minutes have expired, I ask unanimous consent for an additional minute of time to respond to my colleague's question.

Mr. KYL. Mr. President, if I were proposing some new sanctions regime, that would be an entirely appropriate request, and of course I would accede to it. I am not asking for any new sanctions or any new law. All this amendment does is to say that the money in this appropriations bill doesn't go to a country that is doing these kinds of exports or imports to Iran. That is all. We have the power of the purse, and surely we can restrict our own expenditure of money to countries that are cooperating with us in dealing with Iran, rather than dealing with Iran. I urge my colleagues to support this. It is a very limited amendment. It is not a new policy.

Mr. KYL. Mr. President, as I told the leader, we had a list of 36 amendments filed. I told the majority leader that I thought we could get that list down to 10 or 12, and that is still my intention.

Mr. KYL. Mr. President, it seems to me if the Senator from Louisiana has indicated he will object to the unanimous consent unless his amendment--No. 621, I gather?

Mr. KYL. Is on the list, that is a question, then, for the leader to address. I wanted to indicate that we have a number of Members who have amendments they want to offer, and we are going to work hard to make sure all our Members who want to offer amendments can do so. At the same time, we are going to do our best to ensure that is not an unreasonable list of amendments. Obviously, Members who insist on having an amendment as a condition to the unanimous consent request can make that point clear.

Mr. KYL. Mr. President, I would say to the leader that I think that is correct. That is going to require a lot of effort on this side to reduce the number of amendments that are pending, as the leader is well aware.

Mr. KYL. In response to my friend, the leader, he has worked very hard, and he has been very successful. But I do, in all seriousness, want to note that in order to try to limit the number of amendments-- because there is a list of 36--it is going to require a lot of work on our side. We are going to, in good faith, do the best we can, but I just want to reiterate as far as I am concerned the Senator from Louisiana will have to be on the list because otherwise he will object to the vitiation of the cloture vote. As far as I am concerned, his amendment is on the list, but at some point the majority leader will have to agree to the list that we offer.

Mr. KYL

Mr. KYL. The following Senators are necessarily absent: the Senator from Nebraska (Mr. Johanns) and the Senator from Alabama (Mr. Sessions).

Mr. KYL. The following Senators are necessarily absent: the Senator from Nebraska (Mr. Johanns) and the Senator from Alabama (Mr. Sessions).

Mr. KYL. The following Senators are necessarily absent: the Senator from Nebraska (Mr. Johanns) and the Senator from Alabama (Mr. Sessions).

Mr. KYL. Mr. President, while the leader is still here, I ask unanimous consent that the Thune amendment No. 635, and the Wicker amendment No. 607 be modified with the changes that are at the desk.

Mr. KYL. Mr. President, in deference to the majority leader's request, I will not ask that amendment No. 635--

Mr. KYL. I will.

Mr. KYL. Mr. President, I was going to offer for consideration my amendment No. 634, but I will do that after the second vote at the request of the majority leader. Let me take a couple minutes right now to explain what this amendment is. During the Presidential campaign, President Obama said: If we can impose the kinds of sanctions that, say, for example, Iran right now imports gasoline, even though it's an oil-producer, because its oil infrastructure has broken down, if we can prevent them from importing the gasoline that they need and the refined petroleum products, that starts changing their cost-benefit analysis. That starts putting the squeeze on them. Indeed, I think the President is exactly right about that. I know of no disagreement with that proposition. I also think there would be no disagreement with the proposition that U.S. taxpayers should not be supporting Iran's energy sector. As a result, I have offered or I will be offering this amendment No. 634 that does exactly that. It says very simply: That none of the funds made available in this appropriations legislation, can go to companies helping Iran either import or export energy or energy-related goods. It also does give the President the authority to waive the provision if he deems it necessary for a valid national security reason. Two quick points for colleagues who may say: Well, of course, we are not going to allow any of this money to go to companies that provide this kind of relief to Iran's energy sector. I would note two examples. Senator Lieberman and I sent a letter to the Export-Import Bank last October because the bank gave $900 million to loan guarantees to a company that was exporting gasoline to Iran. When we asked the bank whether it thought the taxpayers should be funding those kinds of benefits to Iran, one of the points raised in the response to me, one that was, by the way, rather indirect in answering the question I asked was: The Ex-Im Bank generally is prohibited from taking foreign policy determinations into account when making credit decisions pursuant to its Charter. Well, of course, those are the kinds of considerations the American taxpayers would want to be taken into account. I would also note, on Monday, the Wall Street Journal noted that several of our colleagues from the other body wrote to the Secretary of Energy concerning a purchase of crude oil from another company doing business in Iran's energy sector. In this case, the company is named Vitol, a Netherlands trading firm that was fined $17.5 million after a jury convicted the company for criminal misdeeds related to the oil-for-food scandal. Obviously, the U.S. Government should not be doing business with a company such as that. Mr. President, I ask unanimous consent that a piece from the American Foreign Policy Council by Orde Kittrie and carried, I believe, in the Wall Street Journal, be printed in the Record at the end of my comments.

Mr. KYL. I would hope when my colleagues have an opportunity to vote on this amendment, they will agree that ensuring the appropriate use of American taxpayer money is important, it is one of our obligations. We agree with the President that is the kind of thing we can do to put some pressure on Iran, and as a result, we should not be sending our money to companies that would be supporting the energy sector in Iran. I appreciate my colleagues' consideration of the amendment when we have an opportunity to offer it, debate it, and vote on it. Exhibit 1 [From the Wall Street Journal, Nov. 13, 2008] How to Put the Squeeze on Iran Cutting off its gasoline imports may be the only peaceful way to get Tehran to abandon its nuclear weapons program (By Orde F. Kittrie) If Barack Obama is to persuade Iran to negotiate away its illegal nuclear weapons program, he will first need to generate more leverage than what the Bush administration is leaving him with. The current U.N. sanctions have proven too weak to dissuade Tehran's leaders, and Russia and China seem determined to keep those sanctions weak. Meanwhile, the regime continues to insist there are no incentives in exchange for which it would halt or even limit its nuclear work. However, Tehran has an economic Achilles' heel--its extraordinarily heavy dependence on imported gasoline. This dependence could be used by the United States to peacefully create decisive leverage over the Islamic Republic. Iranian oil wells produce far more petroleum (crude oil) than Iran needs. Yet, remarkably for a country investing so much in nuclear power, Iran has not developed sufficient capacity to refine that crude oil into gasoline and diesel fuel. As a result, it must import some 40% of the gasoline it needs for internal consumption. In recent months, Iran has, according to the respected trade publication International Oil Daily and other sources including the U.S. government, purchased nearly all of this gasoline from just five companies, four of them European: the Swiss firm Vitol; the Swiss/Dutch firm Trafigura; the French firm Total; British Petroleum; and one Indian company, Reliance Industries. If these companies stopped supplying Iran, the Iranians could replace only some of what they needed from other suppliers--and at a significantly higher price. Neither Russia nor China could serve as alternative suppliers. Both are themselves also heavily dependent on imports of the type of gasoline Iran needs. Were these companies to stop supplying gasoline to Iran, the world-wide price of oil would be unaffected--the companies would simply sell to other buyers. But the impact on Iran would be substantial. When Tehran attempted to ration gasoline during the summer of 2007, violent protests forced the regime to back down. Cutting off gasoline sales to Iran, or even a significant reduction, could have an even more dramatic effect. In Congress, there is already bipartisan support for peacefully cutting off gasoline sales to Iran until it stops its illicit nuclear activities. Barack Obama, John McCain and the House of Representatives have all declared their support. On June 4 of this year, for example, Sen. Obama said at a speech in Washington, D.C.: ``We should work with Europe, Japan and the Gulf states to find every avenue outside the U.N. to isolate the Iranian regime--from cutting off loan guarantees and expanding financial sanctions, to banning the export of refined petroleum to Iran.'' He repeated this sentiment during the presidential candidates' debate on Oct. 7: ``Iran right now imports gasoline . . . if we can prevent them from importing the gasoline that they need . . . that starts changing their cost-benefit analysis. That starts putting the squeeze on them.'' How do we stop the gasoline from flowing? The Bush administration has reportedly never asked the Swiss, Dutch, French, British or Indian governments to stop gasoline sales to Iran by the companies headquartered within their borders. An Obama administration should make this request, and do the same with other governments if other companies try to sell gasoline to Iran. But the U.S. also has significant direct leverage over the companies that currently supply most of Iran's imported gasoline. Consider India's Reliance Industries which, according to International Oil Daily, ``reemerged as a major supplier of gasoline to Iran'' in July after taking a break for several months. It ``delivered three cargoes of gasoline totaling around 100,000 tons to Iran's Mideast Gulf port of Bandar Abbas from its giant Jamnagar refinery in India's western province of Gujarat.'' Reliance reportedly ``entered into a new arrangement with National Iranian Oil Co. (NIOC) under which it will supply around . . . three 35,000-ton cargoes a month, from its giant Jamnagar refinery.'' One hundred thousand tons represents some 10% of Iran's total monthly gasoline needs. The Jamnagar refinery is heavily supported by U.S. taxpayer dollars. In May 2007, the U.S. Export-Import Bank, a government agency that assists in financing the export of U.S. goods and services, announced a $500 million loan guarantee to help finance expansion of the Jamnagar refinery. On Aug. 28, 2008, Ex-Im announced a new $400 million long- term loan guarantee for Reliance, including additional financing of work at the Jamnagar refinery. Or consider the Swiss firm Vitol. According to International Oil Daily, Vitol ``over the past few years has accounted for around 60% of the gasoline shipped to Iran.'' Vitol is currently building a $100 million terminal in Port Canaveral, Florida. Last year, when Minnesota Gov. Tim Pawlenty discovered that an Indian company, Essar, was seeking to both invest some $1.6 billion in Minnesota and invest over $5 billion in building a refinery in Iran, he put Essar to a choice. Mr. Pawlenty threatened to block state infrastructure subsidies and perhaps even construction permits for the Minnesota purchase unless Essar withdrew from the Iranian investment. Essar promptly withdrew from the Iranian investment. Florida officials could consider taking a similar stance with Vitol. The Minnesota example is not the only precedent. U.S. outreach to foreign banks and to oil companies considering investing in Iran's energy sector has reportedly convinced more than 80 banks and several major potential oil-field investors to cease all or some of their business with Iran. Among them: Germany's two largest banks (Deutsche Bank and Commerzbank), London-based HSBC, Credit Suisse, Norwegian energy company StatoilHydro, and Royal Dutch Shell. A sustained initiative may be able to convince most or all current and potential suppliers that the profits to be gained from continuing to sell gasoline to Iran will be dwarfed by the lost loan guarantees and subsidies and foregone profits they will incur in the U.S. from continuing to do business with Iran. Last Sunday, a group of 60 Iranian economists called for the regime to drastically change course, saying that President Mahmoud Ahmadinejad's ``tension-creating'' foreign policy has ``scared off foreign investment and inflicted heavy damage on the economy.'' The economists said the current sanctions, as weak as they are, have cost Iran billions of dollars by forcing it to use middlemen for exports and imports. Halting Iran's gasoline supply could contribute to reaching a tipping point--at which economic pressures and protests convince the regime its illicit nuclear program poses too great a risk to its grip over the Iranian people. If the federal and key state governments in the U.S. were to make it their goal to achieve a halt by companies selling gasoline to Iran, it could be a game-changer. It may be our best remaining hope for peacefully convincing Iran to desist from developing nuclear weapons.