Pro-Israel lobby backs sanctions on Iran bank

December 7, 2011 - 7:02 PM

WASHINGTON (AP) — The powerful pro-Israel lobby and a leading Jewish advocacy group on Wednesday endorsed tough sanctions on Iran's Central Bank as Congress wrestles with an Obama administration plea to ease the impact of the penalties to avoid driving up oil prices.

In a letter to lawmakers, the American Israel Public Affairs Committee said the sanctions would contribute to the U.S. effort to pressure Tehran economically and could dissuade Iran from pursuing a nuclear weapon. Separately, the American Jewish Committee wrote to Defense Secretary Leon Panetta backing the penalties that would target foreign financial institutions that do business with the Central Bank.

Last week, the Senate voted 100-0 for an amendment by Sens. Mark Kirk, R-Ill., and Bob Menendez, D-N.J., to add the sanctions to a broad defense bill. House and Senate negotiators are meeting this week to try to iron out the differences between their respective bills and produce a final version of the legislation for President Barack Obama's signature.

The administration has asked for substantive changes to the sanctions. Treasury Secretary Timothy Geithner, in a Dec. 1 letter to senators, said the administration opposed the measure in its current form because it would undermine its effort to bring international pressure on Iran. He also warned that instead of penalizing Tehran, the sanctions could have the opposite effect by boosting oil prices and benefiting Iran financially.

"Iran's greatest economic resource is its oil exports," Geithner wrote. "Sales of crude oil line the regime's pockets, sustain its human rights abuses and feed its nuclear ambitions like no other sector of the Iranian economy."

Weighing in forcefully on the debate, both AIPAC and the American Jewish Committee embraced the sanctions without changes.

"The Senate provision grants generous flexibility to the president by providing him with waiver authority to ensure that sanctions neither increase oil prices nor otherwise harm U.S. national security interests," AIPAC wrote.

The American Jewish Committee said it was aware of administration efforts to delay implementation of the sanctions from 60 days to 180 days and weaken their impact.

"We are immensely appreciative of the administration's efforts to thwart Iran's drive for nuclear weapons capability. It is against this background that we strongly urge reconsideration of any efforts by the administration to dilute this amendment," wrote executive director David Harris in a letter to Panetta.

The sanctions would target foreign financial institutions that do business with the Central Bank of Iran, barring them from opening or maintaining correspondent operations in the United States. It would apply to foreign central banks only for transactions that involve the sale or purchase of petroleum or petroleum products.

The sanctions on petroleum would only apply if the president, in six months, determines there is a sufficient alternative supply and if the country with jurisdiction over the financial institution has not significantly reduced its purchases of Iranian oil. It also allows the president to waive the penalties based on national security.