U.S. Hypocrisy: Billions in deals with Iran

By Jo Becker
NYT

Despite sanctions and trade embargoes, over the past decade the United States government has allowed American companies to do billions of dollars in business with Iran and other countries blacklisted as state sponsors of terrorism, an examination by The New York Times has found.

At the behest of a host of companies — from Kraft Food and Pepsi to some of the nation’s largest banks — a little-known office of the Treasury Department has granted nearly 10,000 licenses for deals involving countries that have been cast into economic purgatory, beyond the reach of American business.

Most of the licenses were approved under a decade-old law mandating that agricultural and medical humanitarian aid be exempted from sanctions. But the law, pushed by the farm lobby and other industry groups, was written so broadly that allowable humanitarian aid has included cigarettes, Wrigley’s gum, Louisiana hot sauce, weight-loss remedies, body-building supplements and sports rehabilitation equipment sold to the institute that trains Iran’s Olympic athletes.

Hundreds of other licenses were approved because they passed a litmus test: They were deemed to serve American foreign policy goals. And many clearly do, among them deals to provide famine relief in North Korea or to improve Internet connections — and nurture democracy — in Iran. But the examination also found cases in which the foreign-policy benefits were considerably less clear.

In one instance, an American company was permitted to bid on a pipeline job that would have helped Iran sell natural gas to Europe, even though the United States opposes such projects. Several other American businesses were permitted to deal with foreign companies believed to be involved in terrorism or weapons proliferation. In one such case, involving equipment bought by a medical waste disposal plant in Hawaii, the government was preparing to deny the license until an influential politician intervened.

In an interview, the Obama administration’s point man on sanctions, Stuart A. Levey, said that focusing on the exceptions “misses the forest for the trees.” Indeed, the exceptions represent only a small counterweight to the overall force of America’s trade sanctions, which are among the toughest in the world. Now they are particularly focused on Iran, where on top of a broad embargo that prohibits most trade, the United States and its allies this year adopted a new round of sanctions that have effectively shut Iran off from much of the international financial system.

“No one can doubt that we are serious about this,” Mr. Levey said.

But as the administration tries to press Iran even harder to abandon its nuclear program — officials this week announced several new sanctions measures — some diplomats and foreign affairs experts worry that by allowing the sale of even small-ticket items with no military application, the United States muddies its moral and diplomatic authority.

“It’s not a bad thing to grant exceptions if it represents a conscious policy decision to give countries an incentive,” said Stuart Eizenstat, who oversaw sanctions policy for the Clinton administration when the humanitarian-aid law was passed. “But when you create loopholes like this that you can drive a Mack truck through, you are giving countries something for nothing, and they just laugh in their teeth. I think there have been abuses.”

What’s more, in countries like Iran where elements of the government have assumed control over large portions of the economy, it is increasingly difficult to separate exceptions that help the people from those that enrich the state. Indeed, records show that the United States has approved the sale of luxury food items to chain stores owned by blacklisted banks, despite requirements that potential purchasers be scrutinized for just such connections.

Enforcement of America’s sanctions rests with Treasury’s Office of Foreign Assets Control, which can make exceptions with guidance from the State Department. The Treasury office resisted disclosing information about the licenses, but after The Times filed a federal Freedom of Information lawsuit, the government agreed to turn over a list of companies granted exceptions and, in a little more than 100 cases, underlying files explaining the nature and details of the deals. The process took three years, and the government heavily redacted many documents, saying they contained trade secrets and personal information. Still, the files offer a snapshot — albeit a piecemeal one — of a system that at times appears out of sync with its own licensing policies and America’s goals abroad.

In some cases, licensing rules failed to keep pace with changing diplomatic circumstances. For instance, American companies were able to import cheap blouses and raw material for steel from North Korea because restrictions loosened when that government promised to renounce its nuclear weapons program and were not recalibrated after the agreement fell apart.

Mr. Levey, a Treasury under secretary who held the same job in the Bush administration, pointed out that the United States did far less business with Iran than did China or Europe; in the first quarter of this year, 0.02 percent of American exports went to Iran. And while it is “a fair policy question” to ask whether Congress’s definition of humanitarian aid is overly broad, he said, the exception has helped the United States argue that it opposes Iran’s government, not its people. That, in turn, has helped build international support for the tightly focused financial sanctions.

Beyond that, he and the licensing office’s director, Adam Szubin, said the agency’s other, case-by-case, determinations often reflected a desire to balance sanctions policy against the realities of the business world, where companies may unwittingly find themselves in transactions involving blacklisted entities.

“I haven’t seen any licenses that I thought we should have done differently,” Mr. Szubin said.

Behind a 2000 Law

For all the speechifying about humanitarian aid that attended its passage, the 2000 law allowing agricultural and medical exceptions to sanctions was ultimately the product of economic stress and political pressure. American farmers, facing sharp declines in commodity prices and exports, hoped to offset their losses with sales to blacklisted countries.

The law defined allowable agricultural exports as any product on a list maintained by the Agriculture Department, which went beyond traditional humanitarian aid like seed and grain and included products like beer, soda, utility poles and more loosely defined categories of “food commodities” and “food additives.”

Even before the law’s final passage, companies and their lobbyists inundated the licensing office with claims that their products fit the bill.

Take, for instance, chewing gum, sold in a number of blacklisted countries by Mars Inc., which owns Wrigley’s. “We debated that one for a month. Was it food? Did it have nutritional value? We concluded it did,” Hal Eren, a former senior sanctions adviser at the licensing office, recalled before pausing and conceding, “We were probably rolled on that issue by outside forces.”

While Cuba was the primary focus of the initial legislative push, Iran, with its relative wealth and large population, was also a promising prospect. American exports, virtually nonexistent before the law’s passage, have totaled more than $1.7 billion since.

In response to questions for this article, companies argued that they were operating in full accordance with American law.

Henry Lapidos, export manager for the American Pop Corn Company, acknowledged that calling the Jolly Time popcorn he sold in Sudan and Iran a humanitarian good was “pushing the envelope,” though he did give it a try. “It depends on how you look at it — popcorn has fibers, which are helpful to the digestive system,” he explained, before switching to a different tack. “What’s the harm?” he asked, adding that he didn’t think Iranian soldiers “would be taking microwavable popcorn” to war.

Even the sale of benign goods can benefit bad actors, though, which is why the licensing office and State Department are required to check the purchasers of humanitarian aid products for links to terrorism. But that does not always happen.

In its application to sell salt substitutes, marinades, food colorings and cake sprinkles in Iran, McCormick & Co. listed a number of chain stores that planned to buy its products. A quick check of the Web site of one store, Refah, revealed that its major investors were banks on an American blacklist. The government of Tehran owns Shahrvand, another store listed in the license. A third chain store, Ghods, draws many top officials from the Islamic Revolutionary Guards Corps, which the United States considers a terrorist organization.

The licensing office’s director, Mr. Szubin, said that given his limited resources, they were better spent on stopping weapons technology from reaching Iran. Even if the connections in the McCormick case had come to light, he said, he still might have had to approve the license: the law requires him to do so unless he can prove that the investors engaged in terrorist activities own more than half of a company.

“Are we checking end users? Yes,” he said. “But are we doing corporate due diligence on every Iranian importer? No.”

A McCormick spokesman, Jim Lynn, said, “We were not aware of the information you shared with us and are looking into it.”

Political Influence

Beyond the humanitarian umbrella, the agency has wide discretion to make case-by-case exceptions. Sometimes, political influence plays a role in those deliberations, as in a case involving Senator Daniel Inouye of Hawaii and a medical-waste disposal plant in Honolulu.

On July 28, 2003, the plant’s owner, Samuel Liu, ordered 200 graphite electrodes from a Chinese government-owned company, China Precision Machinery Import Export Corporation. In an interview, Mr. Liu said he had chosen the company because the electrodes available in the United States were harder to find and more expensive. Two days later, the Bush administration barred American citizens from doing business with the Chinese company, which had already been penalized repeatedly for providing missile technology to Pakistan and Iran.

By the time Customs seized the electrodes on Nov. 5, waste was piling up in the sun. Nor did prospects look good for Mr. Liu’s application to the licensing office seeking to do an end run around the sanctions. On Nov. 21, a State Department official, Ralph Palmiero, recommended that the agency deny the request since the sanctions explicitly mandated the “termination of existing contracts” like Mr. Liu’s.

That is when Senator Inouye’s office stepped in. While his electrodes were at sea, Mr. Liu had made his first ever political contribution, giving the senator’s campaign $2,000. Mr. Liu says the timing was coincidental, that he was simply feeling more politically inclined. Records show that an Inouye aide called the licensing office on Mr. Liu’s behalf the same day that Mr. Palmiero recommended denying the application. The senator himself wrote two days later.

Mr. Inouye’s spokesman, Peter Boylan, said the contribution had “no impact whatsoever” on the senator’s actions, which he said were motivated solely by concern for the community’s health and welfare.

The pressure appears to have worked. The following day, the licensing office’s director at the time asked the State Department to reconsider in an e-mail that prominently noted the senator’s interest. A few days later, the State Department found that the purchase qualified for a special “medical and humanitarian” exception.

The license was issued Dec. 10. Two months later, Mr. Liu sent the senator another $2,000 contribution, the maximum allowable. Mr. Levey said he could not comment on the details of a decision predating his tenure. But he noted that sanctions against the Chinese company had since been toughened, and added, “Certainly this transaction wouldn’t be authorized today.”

Curious Exemptions

Mr. Liu’s license is hardly the only one to raise questions about how the government determines that a license serves American foreign policy.

There is also, for instance, the case of Irisl, an Iranian government-owned shipping line that the United States blacklisted in 2008, charging that because it routinely used front companies and misleading terms to shroud shipments of banned arms and other technology with military uses, it was impossible to tell whether its shipments were “licit or illicit.”

Less than nine months earlier, the licensing office had permitted a Japanese subsidiary of Citibank to carry out the very type of transaction it was now warning against. Records show that the bank had agreed to confirm a letter of credit guaranteeing payment to a Malaysian exporter upon delivery of what were described as split-system air-conditioners to a Turkish importer. Though the government had yet to blacklist Irisl, sanctions rules already prohibited dealings with Iranian companies. So when the bank learned that the goods were to be shipped aboard the Irisl-owned Iran Ilam, it sought a license.

The license was granted, even though the Treasury Department’s investigation of Irisl was well under way and the United States had reason to be suspicious of the Iran Ilam in particular; that summer, the ship had attracted the attention of the intelligence community when it delivered a lathe used to make nuclear centrifuge parts from China to Iran, according to government officials who requested anonymity to speak about a previously unpublicized intelligence matter.

Mr. Szubin said that since the blacklisting of Irisl, his agency had forced banks to extricate themselves from such transactions. But at the time the Citibank license was issued, his agency regularly issued licenses in cases like this one, where at the time of the transaction, the bank had no way of knowing that Irisl was involved and where the shipping line would be paid by a foreign third party anyway. To depart from the norm, he said, risked facing a lawsuit charging unfair treatment and tipping Irisl off that it was under investigation.

But if the government has sometimes been willing to grant American businesses a break, some companies have recently decided that the cost to their reputations outweighs the potential profit.

General Electric, which has been one of the leading recipients of licenses, says it has stopped all but humanitarian business in countries listed as sponsors of terrorism and has promised to donate its profits from Iran to charity.

As Joshua Kamens, the head of a company called Anndorll, put it, he knew from almost the minute he applied for a license to sell sugar in Iran that “it would come back to haunt me.” Although he received the go-ahead, he decided to back out of the deal.

“I’m an American,” he said. “Even though it’s legal to sell that type of product, I didn’t want to have any trade with a country like Iran.”

EU Dictators to Control National Budgets

Sovereign Independent

As reported in today’s Irish Independent, the EU will be given first option on whether to approve of Irish fiscal policy thus opening

If the theory of Super States is adopted globally, the countries will effectively loose independence, sovereignty, identity and liberty.

the way for another €3 billion of cuts in spending, no doubt in public services we all pay our taxes into. This is of course dictatorship in its most basic form.

When a nation state is no longer in control of its own finances, which have been handed over to an unelected cabal of appointed lackeys, then the nation state no longer exists. This is exactly the position which Ireland and every nation in the EU face today. Let’s be clear, there are no longer nation states. Taking over a nation’s finances is only the start. When we no longer have individual countries, with individual cultures, as they are rapidly being mixed into a standardised ‘brand’, the result will be that in a generation or two from now, we will no longer have any distinction between individual sovereign states which could be classed as cultural identity whatsoever.

This is not only undesirable to the native peoples of the nations of Europe but it is also detrimental to world culture as a whole. I would envisage a day when travelling abroad, if still permitted, will be no more of a cultural experience than travelling through ‘one size fits all’ airports and staying in brand name hotels. Every ‘experience’ will be standardised.

Sticking with financial control, why is it that our ‘elected’ representatives have sold us off to these pirates of finance whereby they have allowed an unelected, private organisation to dictate terms and conditions over and above our national governments as to what they will and will not plan for in their own fiscal policy to benefit the people of their nations? When did outside forces have any right to interfere with the internal finances of a nation state? Haven’t we witnessed many times in history the ‘economic sanctions’ imposed on nations? How about the recent example of Iraq which was spuriously, and ultimately dishonestly, accused of having weapons of mass destruction? The result of these economic sanctions was mass starvation and death of hundreds of thousands of innocent Iraqis.

I’m not saying it’ll come to that in Europe but at the same time when these criminals, and let’s not mince our words here, they are criminals, when they are allowed to impose what amount to economic sanctions on our country then we are in for extremely hard times ahead with the eventual result being mass poverty across Europe.

What then for the EU?

It clearly will not have worked as it was supposed to so why would we still want to be part of it?

Why would any nation want to be part of a criminal organisation which has gone out of its way to impoverish the ordinary peoples of what were once independent nation states whilst at the same time destroying cultural identity?

The powers that be insisted and repeated their lies that the single European currency would solve all of our financial troubles forever. That has obviously not worked either and indeed has brought us closer to the brink of utter catastrophe in terms of our financial security.

But of course, that was always the intention of the European Union. Its job was always to amalgamate all the nations of Europe under their control so that when the time was right, like now, they could collapse every nation in the Union to achieve their ultimate goal of bringing into being the single European Soviet Union Superstate. This was finally achieved after the illegal and blatantly fraudulent 2nd Lisbon Referendum in which the Irish people were robbed of the last elements of national sovereignty thus plunging the other members of the EU into the new European Soviet Bloc with all rights and rules being dictated from Brussels.

The European Parliament was overnight given the status of a National Superstate, with all the powers of a government over the 500 million people of Europe, with only 27 unelected Commissars deciding our fate.

Whilst those politicians pushing for a ‘YES’ vote in the bogus referendum celebrated a victory before the first vote was counted, they never told the people that they had effectively sold them into slavery to a foreign power, namely the European Union; a European Union that have steadfastly refused to submit its own accounts for scrutiny, to any one of the nation states funding it, for over 15 YEARS!

Why have we allowed, what is obviously a corrupt organisation, to take over our lives to the extent that they decide how our tax money is to be spent? No doubt a lot of it will be going into the grubby paws of these very same commissars who are dictating that we the people need to cut back on everything from energy consumption to foreign holidays and even what foods we will eventually have to eat as GMO crops are rolled out across the continent.

I was never asked about any of this in my entire life and certainly never voted for any of it.

If you voted ‘YES’ for the Lisbon Referendum are you happy with the results so far?

Do you have one of those mystical jobs that were promised by every major political party at the time?

Do you still have the job you had then or are you one of the close half a million officially unemployed people in a country of approximately 4 million people with a workforce of less than 2 million?

That’s a 25% unemployment rate folks!

Do you have the security we were promised even though what security they were talking about was never discussed?

Financial security is the bedrock of any civilised society. This doesn’t necessarily mean monetary security. That is simply a red herring and a fraud in itself being perpetrated on humanity since the first banker lent to the first borrower thousands of years ago.

No, ‘financial’ security comes in many shapes and forms. The main concerns for human beings since the beginning of time have been firstly, shelter whereby we need some form of a home to protect us from the elements and to raise our families. The second basic element is of course good healthy food combined with clean water. Some kind of health security is also essential although good healthy food and clean water go a long way to preventing any health problems in themselves.

Every person in this country could now be living in a home, perhaps not the ideal home, but a home nevertheless, if the wads of cash given to private corrupt banks had simply been given to the people via payment of mortgages and personal debt to the extent that the country could have started with clean slate so to speak whereby we could then have started creating our own independent monetary system in whichever form that took.

Why then have we borrowed billions from private banks simply to hand it over to other private banks which the taxpayers of Ireland have to pay for and who will now have to live in poverty for generations?

Why are our politicians not on trial for ECONOMIC TERRORISM and TREASON?

At this stage in the game it is probably too late for any intelligent debate from any intelligent political figure because let’s face it, they are extremely hard to find despite the claims of the establishment that we pay politicians so much money to attract the best minds in the country to the political process.

Does anyone seriously think that we have the best minds in politics? If that were indeed the case we wouldn’t be in the mess we’re in would we?

It’s about time the public woke up to the fact that they have been duped all their lives and in generations prior to that. It’s a bitter pill to swallow and it does take an element of personal courage to admit, not only to yourself that you have been conned, but also to tell other people that they’ve been conned too.

Firstly they will ridicule you, secondly they’ll shun you until eventually something will happen to them personally which will dispel any doubts in their minds that something is seriously wrong in society, not only in Ireland, but across the globe. When innocent human beings are being blown to bits in an illegal war which has been proven to have been started using lies and deception, one would like to think that that time cannot be far off. I won’t hold my breath though. The current ‘crop’ of ‘human beings’ seem incapable of empathy for their fellow man whatever the dreadful circumstances the victims find themselves in. We have in effect been utterly desensitized to the suffering of others with the ‘self’ being the most important being it seems in most people’s lives.

In terms of people finally accepting that we are all in serious trouble, let’s hope that it’s not the day they turn up at Tesco’s to find the shelves empty and starvation becomes a real possibility. This is not wild ‘conspiracy theory’. This is exactly how things were in the Soviet Union when millions, just over half a century ago, were allowed to starve to death by Stalin and his cronies whilst they lived in absolute luxury in a land of plenty for them.

The new European Soviet Superstate is riddled with so called ‘ex’ Soviet Communist Party members who were active in Eastern Europe right up to the day they became part of the European Union.

I don’t want to live in the Soviet Union or in, as the UN has pointed, the state we should all try to emulate, the People’s Republic of China.

Every human being in the EU and around the world has a basic right to live their lives free of restriction so far as they do no harm to any fellow human being or their property. This is the basis of common law which the vast majority of people adhere to. We don’t need ‘Big Brother’ diktats from anyone telling us what we can and can’t do, what licenses we need for this or that and how many children we’re ‘allowed’ to have.

I’m sick of it all and it’s about time that the entire human race extricated its head from the sand and got off its knees. We do not owe our lives to any state whether real or created. We are not slaves to be bought and sold at the whim of unelected bureaucrats in a puppet government far removed from any nation state.

Responsibility comes at a price but ultimately it must be a price worth paying if the alternative is so bleak.