The Obama administration has been bragging about the strength of the international coalition it has assembled against Iran and the “crippling sanctions” it has imposed on the Islamist regime. But the dirty little secret about the sanctions is they are riddled with loopholes. Not only has the Treasury Department issued thousands of exemptions to companies that wish to do business with Iran, but President Obama has also specifically granted permission to China and India to go on importing oil from it. Though the sanctions have caused pain to the ordinary Iranian, the government is still raking in more cash from oil sales than it did a decade ago before the sanctions took effect.
This gives some important context to the debate going on in Congress right now about the imposition of a new sanctions bill that takes aim at insurance companies that underwrite Iranian investments. The legislation is vital if a major loophole is to be closed that will make it even more difficult for Iran to conduct commerce. But lobbying from insurance companies that don’t wish to have their businesses impeded are working against the bill. Even more seriously, as the Washington Free Beacon reports, they’ve got Majority Leader Harry Reid on their side.
Though the sanctions legislation is working its way through the House of Representatives, Reid and Tim Johnson (D-S.D.) are doing their best to weaken the bill to please insurance companies that are major donors to their campaigns. Combined with the continued reluctance of the Obama administration — which fought the sanctions that they now boast of to supporters of Israel — the odds of the legislation getting through both houses without being completely watered down are not good.
While previous sanctions bills that limited the ability of Iran’s national bank to do business abroad were able to overcome the administration’s efforts to stop it, the additional burden of having to deal with the influence of the insurance industry may be too much to beat. Reid and Johnson have actually already stopped a previous sanctions bill from including insurance companies. As the WFB’s Adam Kredo notes, insurance lobbyists may even be able to count on some House Republicans to strip the bill of its teeth despite the support of the GOP leadership for the legislation.
Insurance companies are able to work on the sympathy of members of Congress not only because of their campaign donations but because they can claim they and their employees and investors will be hurt by the sanctions. That may be true, but if the embargo on Iran is not airtight, the attempt to convince Iran to give up its nuclear ambitions is hopeless. It may already be too late for sanctions to work, but isolating the terrorist-sponsoring Islamist state is a vital U.S. national interest. For the White House and leading members of the Senate to sabotage this measure while still claiming they are serious about Iran is not just hypocritical. It’s a sign the Democrats are talking out of both sides of their mouths on this issue.