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The federal government has awarded more than $107 billion in contract payments, grants and other benefits over the past decade to foreign and multinational American companies while they were doing business in Iran, despite Washington’s efforts to discourage investment there, records show.
That includes nearly $15 billion paid to companies that defied American sanctions law by making large investments that helped Iran develop its vast oil and gas reserves.
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One of the government’s most powerful tools, at least on paper, to influence the behavior of companies beyond the jurisdiction of the embargo is the Iran Sanctions Act, devised to punish foreign companies that invest more than $20 million in a given year to develop Iran’s oil and gas fields. But in the 14 years since the law was passed, the government has never enforced it, in part for fear of angering America’s allies.
That has given rise to situations like the one involving the South Korean engineering giant Daelim Industrial, which in 2007 won a $700 million contract to upgrade an Iranian oil refinery.
According to the Congressional Research Service, the deal appeared to violate the Iran Sanctions Act, meaning Daelim could have faced a range of punishments, including denial of federal contracts. That is because the law covers not only direct investments, such as the purchase of shares and deals that yield royalties, but also contracts similar to Daelim’s to manage oil and gas development projects.
But in 2009 the United States Army awarded the company a $111 million contract to build housing in a military base in South Korea. Just months later, Daelim, which disputes that its contracts violated the letter of the law, announced a new $600 million deal to help develop the South Pars gas field in Iran.
Petrobras received $2 billion in taxpayers money to develop off the coast of Brazil.
On Nov. 23, Iran’s president, Mahmoud Ahmadinejad, visited Brazil, and the two countries agreed to share technical expertise on energy projects. Iranian officials said they might offer Petrobras additional incentives for further investment.
The New York Times identified 74 corporations that have done business both in Iran and with the United States government over the last decade, using corporate records filed with the Securities Exchange Commission, company Web sites, news accounts confirmed by interviews with company officials, and Congressional reports.
50 U.S. Lawmakers Urge President Obama to Enforce Current Sanctions against Iran as Vienna Talks Stall (http://kirk.house.gov/index.php?option=com_content&task=view&id=3704&Ite mid=88 - broken link)
U.S. Reps. Mark Kirk (R-Ill.) and Ron Klein (D-Fla.), along with 50 Democrats and Republicans, today sent a bipartisan letter to President Obama urging him to enforce current U.S. sanctions against companies investing in Iran’s energy sector. The letter comes one day after multilateral negotiations in Vienna ground to a halt when Iran replaced its lead nuclear negotiator with lower-level officials and made new demands for the right to highly-enriched uranium on Iranian soil.
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