[Congressional Record Volume 143, Number 143 (Wednesday, October 22, 1997)]
[Senate]
[Pages S10915-S10917]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                            THE GAZPROM DEAL

  Mr. D'AMATO. Mr. President, on September 30, Total, a French company, 
and Petronas, a Malaysian company, and Gazprom, a Russian company, 
signed a $2 billion agreement to develop the South Pars oilfields in 
Iran. This contravenes the Iran-Libya Sanctions Act which passed the 
Senate unanimously, and passed the House of Representatives with I 
think all but four votes, and which was signed into law August 5, 1996, 
by President Clinton.
  Mr. President, the history of the Iran-Libya Sanctions Act is one 
that, unfortunately, it seems to me, too many are ready to forget. Too 
many are ready to forget the 300-plus American citizens who were killed 
in PanAm 103, or that two Libyan agents have been indicted in 
connection with that terrorist attack and provided a safe harbor by the 
Libyan Government. Too many of us are fickle, it seems to me, and are 
ready to forget past acts of terrorism committed by these two countries 
because of political expedience, on the altar of corporate profits and 
greed.
  Let us bring their arguments right out here: ``Oh, if we don't 
participate in this, others will. If we don't provide the bullets for 
the killers, others will, so why don't we sell them. Oh, forget the 
fact that this legislation was passed unanimously because, when this 
bill passed it was in close proximity to another tragedy that took 
place, the TWA flight that inexplicably exploded off the shores of Long 
Island.'' When the legislation passed, people were concerned whether or 
not it might have been a terrorist bomb or missile. I am not suggesting 
that it was terrorism, but there was that concern, and so the Congress 
was quick to respond.
  I think we responded correctly. We said to those who are going to do 
business with countries that export terrorism, that are in the business 
of financing the fanatical kinds of acts that result in a terrorist 
attack at the World Trade Center in New York where 6 people are killed, 
that result in the bombing of the barracks in Riyadh in Saudi Arabia 
where our troops are killed, that engage in the kind of terrorist 
attack sponsored by the Libyans where 300-plus Americans are killed; we 
are not going to help promote trade with those countries that played a 
role in these attacks. And if companies and countries want to enter 
into agreements that will promote the financial resources and 
development of Iran and Libya, then they cannot have free access to the 
marketplace in America.
  Is that a sacrifice? Yes, it is. Is it a sacrifice that we have a 
right to expect? I believe it is. Should it be greeted by the French 
Prime Minister standing up and cheering on the day that Total enters 
into this agreement, an agreement that our State Department was aware 
of and attempted to intercede and to get the French to work with us? I 
don't believe so.
  What does that sanction bill provide? It has a litany of 
opportunities for the Libyans and the Iranians to escape punitive 
measures; if they act in conformity with the world community and stop 
sponsoring terrorist attacks, if they begin to show actions that they 
will live and let live, then the President does have the ability to 
relax and alter those sanctions.
  But, Mr. President, to date there has not been one showing, not one, 
that any of those countries, the Libyans or the Iranians, are willing 
to cease and desist from promoting terrorist attacks against the United 
States, against our interests and against those who seek peace and want 
to live in peace. Indeed, if anything, they have become more violent.
  By the way, I say to those who argue that this agreement or this 
arrangement or this law has not worked, it has worked. We know that 
there have been billions of dollars of investments that would have gone 
into promoting the economy of Iran so that they would have more 
resources to export terrorism that has been precluded.
  For the leader of France to stand up and cheer, I believe, is 
horrendous. For him to say that this is extraterritorial legislation 
flies in the face of common sense. Are you really saying that the 
United States cannot take a position;

[[Page S10916]]

``that we are not going to support terrorist nations, that there will 
be sanctions, and that you cannot do business with us as if everything 
is fine and well and that you are comporting yourself as a good world 
citizen?''
  Let me suggest to you that many of those who decry the U.S. position 
were the same who were so quick to come in and say a recent corporate 
merger that was about to take place should not take place. Oh, yes, the 
European Community, led by, once again, our friends the French, were 
ready to step in and say that the agreement between two American 
companies, McDonnell Douglas and Boeing, be invalidated. What about 
extraterritoriality in that situation? And in that case we are talking 
about two companies that are not exporting terrorism right here within 
the United States. Yet today we have the European Common Market talking 
about sanctioning the United States if we were to proceed in allowing 
those two aircraft manufacturers to merge and not ask for waivers and 
not work out a situation, because this would be competition that would 
be difficult for a European company, Airbus.
  So let us not have a situation where there are those who are willing 
to condemn us for fighting terrorism--and by the way, how do we take on 
those who promote terrorism? We cannot bomb them. I am not suggesting 
that we do. But should we not deny them the financial resources with 
which to fuel the engine for exporting terrorism? Of course, we should.
  It takes a little courage. I think that our administration has not 
done the kind of things that it should do behind the scenes, working 
with our allies to make this policy one that is easier to enforce. We 
have not told the Europeans to stand up to the Iranians, and say ``if 
you want to be able to have commerce and trade like others, then you 
have to behave. There is a code of conduct that we expect of you, or 
otherwise, there will be sanctions.'' We have simply not told them to 
tell the Iranians that.
  There was once a time not too long ago when we imposed sanctions of 
all kinds on our current allies, the Russians, before the wall of 
communism came down. Sanctions that related to human rights, related to 
their anti-democratic activities. We didn't have pure free trade and 
commerce under the sanctions of yesterday, so the sanctions of today 
aren't anything new. For those who say somehow this is terrible, I'll 
tell you what is terrible: I think it is terrible that we have not laid 
our cards on the table with our allies and told them we expect them to 
join with us in the battle against terrorism.
  I received a letter from our colleagues Senator Brownback and Senator 
Kyl, asking that the Banking Committee hold a hearing on the question 
of offering $1 billion of convertible bonds on the U.S. markets. And 
what were these bonds to be used for? They were to be used for helping 
to finance a company by the name of Gazprom; Gazprom, the very Russian 
company that helped bring about this deal promoting the exploration and 
development of the oil fields in Iran. Owing to the fact that Gazprom 
is clearly one of those companies that is in violation of the Iran-
Libyan Sanction Act, and it can be sanctioned, I have a difficult time 
understanding--along with my colleagues Senator Kyl and Senator 
Brownback who have raised the question whether or not we should permit 
financing under our law--whether these financing activities wouldn't be 
in violation of our national security. Do these activities require a 
waiver from the President? We will be holding a hearing next week, next 
Thursday, to ascertain this.
  In addition, I have learned from a number of accounts that Gazprom is 
now negotiating with our Export-Import Bank to get something in the 
area of $800 to $850 million worth of Export-Import Bank credits. This 
is incredible. Today I have written a letter to Senator McConnell in 
which I have asked him to take the appropriate actions to see to it 
that this is not business as usual, that he puts a hold on this as he 
is marking up the appropriations bill dealing with the Export-Import 
Bank.
  I ask unanimous consent the letter dated October 22 be printed in the 
Record.
  There being no objection, the letter was ordered to be printed in the 
Record, as follows:

         U.S. Senate, Committee on Banking, Housing, and Urban 
           Affairs,
                                 Washington, DC, October 22, 1997.
     Hon. Mitch McConnell,
     Chairman, Subcommittee on Foreign Operations, Appropriations 
         Committee, U.S. Senate, Washington, DC.
       Dear Mr. Chairman: I write today with a matter of urgent 
     concern. Gazprom, a Russian company has violated the Iran-
     Libya Sanctions Act by signing a $2 billion contract along 
     with Total, S.A. of France and Petronas of Malaysia, with 
     Iran to develop the South Pars oil field there. This flagrant 
     act cannot be rewarded with U.S. inaction. Most importantly, 
     it must not be rewarded with U.S. export financing.
       Now, after this act of corporate greed and obstructionism 
     of U.S. counter terrorism policy, we learn that Gazprom might 
     well receive some $800 million in Export-Import credits. This 
     cannot be allowed to happen. We must prevent the extension of 
     these loans. There is no reason that we should be financing 
     their violation of our laws and the enrichment of Iran.
       Mr. Chairman, Iran's international misdeeds are legendary. 
     Their sponsorship of international terrorism and their 
     ongoing attempts to obtain weapons of mass destruction should 
     cause all of us great concern. In this vein, Gazprom's aid to 
     Iran cannot and should not be allowed to proceed without 
     penalty. I, therefore, urge you in the strongest of terms, to 
     seek an end to this financing as you prepare the final 
     version of the FY 98 Foreign Operations Appropriations bill 
     in the coming weeks.
       Thank you for your support of this extremely important and 
     urgent request.
           Sincerely,
                                               Alfonse M. D'Amato,
                                                         Chairman.

  Mr. D'AMATO. I urged upon Senator McConnell in the strongest terms to 
seek an end to this financing in the fiscal year 1998 foreign 
operations bill. If, indeed, we are going to have a situation where, on 
one hand we have a law that says you cannot do business with these 
countries, and on the other hand we are indirectly financing a 
corporation which is going to be undertaking these activities, then I 
think this is wrong. How can the United States provide $800 to $850 
million worth of Export-Import Bank credits allowing U.S. companies to 
do more business with companies whose actions violate U.S. law and 
damage U.S. security? So we certainly have an obligation to look into 
this.
  In fact, Gazprom is a company that is closely tied to the Russian 
Prime Minister, Victor Chernomyrdin. And when the Vice President, Vice 
President Gore, was in Russia several weeks ago, he reportedly spoke at 
length, to Mr. Chernomyrdin, about the Russian company's providing 
missile technology to Iran. It is my understanding Mr. Chernomyrdin 
said he had no knowledge of this, and that he could not do anything 
about it.
  What are we talking about? I mean, the fact of the matter is the 
Russians have been providing this technology to Iran. It seems to me 
this situation is like the parent who doesn't want to acknowledge that 
a son or daughter may have some problems with substance abuse, but they 
look the other way. All the signs are there, but they look the other 
way. All the facts are there, but we don't want to have an 
acknowledgment.
  Let me be clear, Iran is the foremost sponsor of international 
terrorism. They threaten our national security, the interests of our 
citizens and our allies, and it is unconscionable that we provide aid 
to them to do so. For the Russian Prime Minister to say we should stop 
worrying about this threat is incredible.
  I think we should start worrying about the damage that will be done 
if this kind of contract is carried out by us acting as willing 
consorts. For Russian companies to be providing missile aid to Iran and 
then helping finance gas deals which will make it possible for the 
Iranians to undertake more terrorist activities, I think is simply 
impermissible. Are we supposed to really be quiet? Sit back? Are we 
going to really read the editorials that say that now I have somehow 
created a terrible situation by coming forth and saying ``let's look at 
this, let's examine this--I believe this is wrong.'' As far as Total 
and Petronas are concerned, I hope the administration understands the 
only correct course to take is to implement the law and to impose the 
sanctions to their fullest and to sit down with our allies and say to 
them: Instead of poking us in the eye deliberately and publicly, we 
should be working together; not for one to advantage oneself and make a 
quick buck.

[[Page S10917]]

  We cannot fail to take this initiative and implement the law the way 
it was intended--it was intended to bring sanctions upon those who deal 
with countries that promote terrorist activities unless and until those 
countries change and mend their ways. Failure to act now will only come 
back to haunt us in the future. It will only bring more in the way of 
conduct that can be detrimental to world peace and to our security and 
to the national interests of the United States. I hope we have the 
courage to stand and act, instead of listening to those in the 
corporate and business sector come down and say: ``Oh, well, if they 
take this action today against Total that tomorrow it may impact 
against us.''
  This is a battle. It is a war. It is a different kind but in many 
ways it is even more dangerous, more pernicious, more evil than the 
kinds of wars where nations may declare themselves against another 
nation. There, you know where the battlefields lie and you understand 
what is taking place. But this is a savage one, which is waged against 
innocent civilians, children--people throughout the world. That is why 
we need to employ all of the economic power and legal and moral 
authority that we have in bringing our allies together with us.
  Mr. President, I yield the floor and I suggest the absence of a 
quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The bill clerk proceeded to call the roll.
  Mr. LOTT. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER (Mr. Coats). Without objection, it is so 
ordered.

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