The U.S. government, while urging the world to cut business ties with Iran, has given government contracts worth nearly $880 million to seven foreign companies involved in Iran's energy sector in recent years, a report said on Wednesday.
The report by the Government Accountability Office spurred criticism by U.S. lawmakers from both parties. They said the government should not be contracting with companies that help Iran's economy as long as Tehran is pursuing nuclear work that the West suspects is aimed at making a bomb.
"It is simply unacceptable for the U.S. government to enrich foreign firms that are enriching the extremist, expansionist, terrorist government of Iran," said Senator Joe Lieberman, an independent and chairman of the Senate Homeland Security and Governmental Affairs Committee.
Foreign companies with big investments in Iran's energy sector can be sanctioned under U.S. law. But Lieberman and others charge this has not been enforced for years, by either Republican or Democratic administrations.
Both the House of Representatives and Senate have passed legislation to tighten and extend U.S. sanctions on Iran and negotiators are working on merging the bills into one.
The Obama administration is also pressing other global powers to agree to a fourth round of U.N. sanctions against Iran over its refusal to halt its nuclear work. Tehran says that work is for energy needs.
The GAO report was a follow-on to a report it did in March in which it identified 41 foreign companies that have commercial activity in Iran's energy sector. The new report identified which of those companies had U.S. government contracts from fiscal years 2005 to 2009.
Pentagon contracts
Most of the contracts were with the Pentagon and were for fuel purchases overseas, Joseph Christoff, the GAO's director of international affairs and trade, told Lieberman's committee. The GAO had not probed whether the company activities were sanctionable under existing U.S. law.
The seven companies were Repsol of Spain; Total of France; Daelim Industrial Company of South Korea; ENI of Italy; PTT Exploration and Production of Thailand; Hyundai Heavy Industries of South Korea; and GS Engineering and Construction of South Korea.
Two of the companies, Repsol and Total, accounted for nearly three-fourths of the $880 million, Christoff said.
Another, Italy's oil and gas major Eni, is among a number of companies that have recently said they are halting business with Iran as pressure for more sanctions on Tehran grows.
The Iran Sanctions Act, dating to the mid-1990s, allows for U.S. sanctions on foreign companies that invest more than $20 million in Iran's energy sector over a 12-month period. Such companies can, for example, be banned from U.S. government procurement. But no sanctions have been imposed under the law.
The State Department is responsible for determining whether companies should be sanctioned, as well as for U.S. diplomacy, and "they tend to weigh one against the other," said Danielle Pletka of the American Enterprise Institute think tank.
Last month the New York Times published its own analysis which found the U.S. government gave $107 billion in contract payments, grants and other benefits over the last 10 years to companies doing business in Iran, including companies in aerospace and carmaking as well as the energy sector.
