Indian nuke deal’s fate could be linked to Iran sanctions bill

A potential standoff involving dueling Iran sanctions bills could determine the fate of a civilian nuclear-cooperation deal with India — a deal that is a high priority for President Bush.

The White House is in the politically awkward position of asking Congress to ratify the high-profile nuclear deal with India while fending off Iran-related legislation that could threaten the U.S.-India pact.

Rep. Ileana Ros-Lehtinen (R-Fla.) and Sen. Rick Santorum (R-Pa.) have introduced bills that seek to cut off funds from Iran that could be applied toward attaining or creating nuclear weapons, enhancing provisions of the Iran and Libya Sanctions Act (ILSA). Each bill possesses provisions that call for the president to sanction oil companies for investing in Iranian petroleum development.

However, the House version, which has 355 co-sponsors, including most members of the Republican and Democratic leadership, provides less flexibility to the president to determine whether to apply such sanctions. The bill would mandate that the president make sanctions determinations for any entity under a pending ILSA investigation within 90 days of the bill’s enactment. That could strain relations with countries whose oil companies are under such investigations.

Recent actions in the House have substantially increased the likelihood of overlapping discussions of the Iran sanctions bill and the nuclear deal. The legislation was voted out of the International Relations Middle East subcommittee in April 2005 but was not scheduled for a full-committee markup vote until a day before Hyde and Rep. Tom Lantos (D-Calif.), ranking member committee of the full committee, introduced the enabling legislation for the nuclear deal with India this March.

Sam Stratman, a spokesman for International Relations Committee Chairman Henry Hyde (R-Ill.), said, “It would be very premature to draw any linkages to the fate of these very different pieces of legislation.” The committee will begin hearings on the nuclear agreement this week. Secretary of State Condoleezza Rice is scheduled to testify today.

The committee cleared the Ros-Lehtinen bill 37-3.

Yesterday, the Congressional Caucus on India and Indian Americans, co-chaired by Ros-Lehtinen, hosted India’s oil minister, Shri Murli Deora, to discuss a proposed natural-gas pipeline project with Iran and how the nuclear-cooperation deal will affect India’s future demands on oil.

With the nuclear-deal legislation referred to the International Relations Committee, the panel will now play an essential role in whether the bill comes to the House floor for a final vote, whether there will be amendments, which the administration has said would jeopardize the deal, and whether it is ultimately approved.

Ros-Lehtinen has said that the India deal will be a tough sell for committee members because India has not signed the Nuclear Non-Proliferation Treaty. She described her sanctions bill as a “free-standing bill” that should not damage U.S.-India relations but said there would be no exceptions from sanctions for those who have been allied with the United States in the past.

The administration is sharply opposed to the Ros-Lehtinen measure. R. Nicholas Burns, undersecretary of state for political affairs, testified last month that the House bill would “strain relations with our close allies whose help we need to change Iran’s behavior” and endorsed a reauthorization of the original ILSA statute.

A subsequent State Department letter, dated two days before the markup vote, said that the administration was “unable to support H.R. 282 as drafted” and that it “would force the president’s hand in dealing with sanctions and waiver decisions” that would hurt national security interests.

An International Relations Committee staffer said that the administration attempted to slow down movement of the bill in order to institute changes that would secure diplomatic flexibility but was ultimately unsuccessful.

The administration has thrown its support behind the Santorum bill, according to Robert Traynham, a spokesman for Santorum.

“State likes the Santorum bill much more than the Ros-Lehtinen bill that the House is considering,” Traynham said.

Members of Santorum’s staff met with Iran experts from the State Department two days after the markup vote of the House bill to discuss the Senate version, while Rice and Santorum conferred about the bill March 8. Traynham added that Santorum is looking to attach his bill to legislative vehicles, including the ILSA reauthorization statute that Burns endorsed.

The Senate bill has 51 co-sponsors, including 18 Democrats, and though introduced last year has remained in the Foreign Relations Committee and has yet to be referred to a subcommittee. Andy Fisher, press secretary for Sen. Richard Lugar (R-Ind.), the committee chairman, said there has been no determination as to whether the Senate will move the Santorum bill for a vote or rely on the Ros-Lehtinen legislation.

As part of a strategic relationship involving issues of counterterrorism, nonproliferation and balancing China’s influence in the region, Bush and Indian Prime Minister Manmohan Singh came to an agreement in March whereby the United States would provide technological assistance and nuclear fuel for India’s civilian nuclear-energy program while India would subject 14 of its 22 nuclear reactors to inspection by the International Atomic Energy Agency. The enabling legislation would allow for provisions of the Atomic Energy Act of 1954 to be waived for India if certain conditions have been met.

The House legislation could trigger tension between the two nations because of India’s previous investments in Iranian petroleum. The nonpartisan Congressional Research Service (CRS) reported that multiple agreements have already been reached between Iran and Indian oil companies in 2004 and 2005. The deals included Iran supplying liquefied natural gas to Indian oil companies over 25- to 30-year periods, as well as private and state-owned companies’ becoming involved in developing oil and gas fields in Iran.

James Eighmie, ILSA Unit chief with the State Department, offered no comment as to whether there are pending investigations involving Indian oil companies.

India has also shown interest in creating a $7.4 billion gas pipeline with Iran, which would help fulfill India’s vast energy needs and sustain its strong economic growth. Iran reportedly hosted talks with oil ministers from India and Pakistan, with future talks scheduled for April. The Bush administration has been consistently opposed to the pipeline project.

A D.C.-based lobbyist, speaking on condition of anonymity, said that the Iran-sanctions bill could be used by opponents of the nuclear deal, specifically members of Singh’s coalition majority who are ardent supporters of Iran, to prevent the agreement from being approved in the Indian Parliament.  

Counterterrorism and nonproliferation interests have gotten in the way of applying ILSA sanctions in the past, according to the CRS. Many projects placed under review by the State Department, during both the Clinton and Bush administrations, have not culminated in sanctions.