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State Department Hedges on Proposed New Russia Sanctions

Trump administration “needs discretion”

Sen. Bob Menendez, D-N.J., questioned a senior State Department official Tuesday about sanctions against Russia. (Bill Clark/CQ Roll Call file photo)
Sen. Bob Menendez, D-N.J., questioned a senior State Department official Tuesday about sanctions against Russia. (Bill Clark/CQ Roll Call file photo)

A senior State Department official on Tuesday urged senators to give the Trump administration considerable leeway as lawmakers contemplate new punitive sanctions against Russia.

“We need discretion with those sanctions,” testified Wess Mitchell, assistant secretary of State for European and Eurasian Affairs, at a Senate Foreign Relations hearing on relations with Russia. “Sanctions without discretion, in my mind, is the antithesis of diplomacy.”

Mitchell was responding to questions from committee ranking member Robert Menendez on whether he would support a new round of sanctions on Russia’s banking and energy sectors.

Menendez, D-N.J., recently introduced legislation with Sen. Lindsey Graham, R-S.C., that in addition to expanding sanctions on a large swath of Russia’s economy would also order mandatory sanctions on officials close to Russian President Vladimir Putin.

Mitchell’s testimony before Foreign Relations came as lawmakers on the Banking Committee pressed Treasury and other State Department officials about why existing sanctions have not done more to alter Russia’s behavior, which includes continued efforts to influence U.S. elections. Banking panel members told Sigal Mandelker, Treasury undersecretary for terrorism and financial crimes, that they were unimpressed with the totality of the sanctions’ impact thus far.

The hearings came as senators also weigh whether to pass additional penalties against Russia, including through a bipartisan bill before the Banking Committee from Sens. Marco Rubio, R-Fla., and Chris Van Hollen, D-Md.

At the Banking hearing, Menendez along with several Republicans, including Jerry Moran of Kansas, John Kennedy of Louisiana and Tim Scott of South Carolina, expressed frustration over the vague testimony of administration witnesses.

“I’m not quite sure why we are having such a difficult time answering simple questions,” Scott said after administration officials declined to answer questions about what sanction steps would be necessary to cause catastrophic harm to the Russian economy. “You seem to be more evasive than helpful.”

Scott said the “very clear and concise” answer was to directly sanction Russia’s energy sector, which is estimated to make up nearly 70 percent of that nation’s economy. “The challenge is that the energy sector represents the sector that many of our allies in Europe depend heavily on,” Scott added.

Lawmakers on both sides of the aisle say that previous rounds of sanctions have been unsuccessful in convincing Putin to cease his election interference and his military campaigns in eastern Ukraine and Syria.

Moran pressed Mandelker on whether the administration would oppose Congress passing another Russia sanctions bill.

After saying she already had plenty of authority to penalize Russia through executive orders and last year’s sanctions law, Mandelker said she would be willing to have a conversation with lawmakers about additional legislative sanctions.

Democrats also argue President Donald Trump, who shocked lawmakers with his deferential demeanor toward Putin at their recent Helsinki summit, cannot be trusted to enforce the congressionally mandated sanctions that lawmakers passed last summer.

The administration has yet to impose secondary sanctions approved by Congress on foreign countries that purchase Russian defense equipment and financial sanctions on certain members of Putin’s inner circle.

Putin assets

In another line of questioning during the Banking hearing, Kennedy pushed Treasury officials on whether Putin has assets in the United States.

“I think Mr. Putin does own assets in the Untied States and I think the Treasury knows what those assets are,” Kennedy told Mandelker. “I would like us to have a frank and honest discussion about the ramifications of seizing those assets.” Mandelker and her co-witnesses frequently said they could not provide answers to senators’ questions in a public setting.

A provision in the Graham-Menendez bill would require a report on Putin’s assets and net worth.

But Moran said he doubted holding a closed session would be more helpful for lawmakers. “Getting answers in a closed session is not easier than in an open session,” he said.

“You guys have filibuster down to an art,” said Banking panel member Sen. Jon Tester, D-Mont., who pressed for an answer from Mandelker on the number of money laundering cases the Treasury Department has passed on to the Justice Department for potential prosecution. “I want to know do you know the number?”

Mandelker responded the Trump administration has been forceful in penalizing Russia, noting that since January 2017 more than 200 individuals and companies with ties to Russia have been sanctioned for a broad range of activities.

Sanctions imposed on Russian businessmen and associates of Putin as part of the 2017 North Korea-Iran-Russia sanctions law have made those individuals “radioactive,” Mandelker said.

According to her submitted testimony, one of those oligarchs, Oleg Deripaska, has seen his estimated net worth sink by roughly 50 percent since he was placed on the Treasury Department’s blacklist in April. Another recently sanctioned oligarch, Viktor Vekselberg, saw his net worth decrease by some $3 billion while other foreign governments have seized his assets located in their jurisdictions.

“We think these approaches are having an impact and changing behavior,” Christopher Ford, assistant secretary of State for international security and nonproliferation, told the Banking Committee. He did not provide examples.

Additionally, the Treasury Department on Tuesday announced new financial sanctions on two Russian individuals and two companies for attempting to help another Russian firm, Divetechnoservices, which was sanctioned in June by the United States. Divetechnoservices was sanctioned for procuring diving equipment for the Federal Security Service, a Russian intelligence agency, which is also under U.S. sanctions.

Watch: McConnell Warns Russians to Keep Out of Elections, Schumer Wants More Than Words

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