David Cohen nomination back on track

Sen. Mark Kirk (R-IL) has lifted his hold on the nomination of David Cohen to be the top sanctions official at the Treasury Department following the administration’s announcement of several targeted sanctions against Iran.

Cohen, whose nomination to replace Stuart Levey as undersecretary for terrorism and financial intelligence had been stalled in the Senate, now could be confirmed as early as this week. Kirk, who had issued the hold late last month due to concerns over the administration’s lack of enforcement of sanctions against Iran, released his hold late last week after Treasury designated Iranian companies such as Iran Air and Tidewater Middle East for sanctions under the Comprehensive Iran Sanction, Accountability, and Divestment Act of 2010 (CISADA).

“I applaud Acting Under Secretary David Cohen for moving decisively to designate Iran Air and a major Iranian port operator responsible for facilitating Iran’s illicit transfer of weapons and other proliferation activities. Both designations will significantly restrict shipping to and from Iran and put even more pressure on the Iranian economy,” Kirk said in a June 23 statement. “Under Secretary Cohen has proven himself to be a worthy successor to former Under Secretary Levey. He has my confidence.”

A Kirk aide confirmed to The Cable that this statement was an acknowledgement that Kirk had removed his hold on Cohen’s nomination. The aide said that Kirk, Cohen, and Sen. Jon Kyl (R-AZ), had a series of meetings and exchanged letters over the last month. Kirk was also reassured by their most recent meeting about two weeks ago.

“After their last meeting, Sen. Kirk lifted his hold and decided to back the nomination,” the Kirk aide said. “[The nomination] has already gone through Finance and Banking so it could be hotlined for Senate confirmation before the Fourth of July recess.”

“Hotlined” is shorthand for a Senate practice wherein the Senate majority leader sends around a message notifying all senators that a nomination is coming to the floor forthwith. If nobody objects, the nomination can quickly be confirmed by voice vote.

In fact, one Senate source told The Cable that the Cohen nomination could reach the Senate floor as soon as Tuesday, as part of a large nominations package the Senate leadership is preparing now.

Last week’s Treasury Department action against Iran Air and Tidewater is just the latest in a series of administration moves to use the tools under CISADA to increase pressure on various parts of the Iranian government and the Iranian economy.

On May 24, the State Department rolled out sanctions against seven companies accused of doing business with Iran’s energy sector. Those designations came one day after the Senate unveiled an entirely new Iran sanctions bill — though that legislation doesn’t appear to have the administration’s support, as then Deputy Secretary of State Jim Steinberg told The Cable it was totally unnecessary.

Steinberg also announced on May 24 that the administration had separately decided to impose sanctions on 16 additional foreign firms and individuals, including three Chinese firms, under the Iran, North Korea, and Syria Nonproliferation Act (INKSNA), which prohibits involvement of foreign companies in those countries’ missile and WMD programs..

Then, on June 9, State announced sanctions on three Iranian government entities involved in human rights abuses, the Islamic Revolutionary Guard Corps (IRGC), the Basij Resistance Force, and Iran’s Law Enforcement Forces (LEF) — as well as LEF Commander Ismail Ahmadi Moghadam.

The June 23 action against Iran Air and Tidewater was a joint State/Treasury effort. It was significant because it targeted the IRGC’s main shipping companies, and because the administration also promised to continue imposing more sanctions.

“The steps we have taken this week seek to limit Iran’s ability to use the global financial system to pursue illicit activities. We have made important progress in isolating Iran, but we cannot waver,” State and Treasury said in a joint statement. “Our efforts must be unrelenting to sharpen the choice for Iran’s leaders to abandon their dangerous course.”

One issue Kirk has been pushing in recent days concerns the huge contracts between the Defense Department and Kuwait and Gulf Link Transport Company (KGL), which may have ties to the Islamic Republic of Iran Shipping Lines (IRISL), an entity long accused of operating a web of shell companies to evade sanctions, and three other Iranian companies already on the banned list of Treasury’s Office of Foreign Assets Control (OFAC).

KGL was recently awarded a nearly $750 million contract by the U.S. Army and another $42 million sole-source contract by the Defense Logistics Agency. Kirk now wants to know if the U.S. military is indirectly putting money into Iranian government coffers.

“I am certain you agree that a prompt investigation is warranted due to the sensitive nature of the contracting work conducted by KGL for our men and women in uniform,” Kirk wrote in a June 21 letter to OFAC Director Adam Szubin.

That letter was a follow-up to another letter Kirk sent May 26 to Defense Secretary Robert Gates, where he pointed out that KGL helped operate the ports used for Iran’s nuclear program and also has influence and control over U.S. military supply lines. Gates has yet to respond to Kirk.

Kirk’s research staff has also compiled an extensive file on KGL’s suspicious activities and associations, which can be found here.

One senior GOP senate aide said it was ironic that the Obama administration has designated for sanctions the Israeli firm Ofer Brothers Group for doing business with Iranian entities that are suspicious but not designated as banned by OFAC, while allowing the U.S. military to do business with similarly suspect firms.

“We’re now at a place where the Defense Department is holding itself to a lower threshold of due diligence for military contracts than the standard applied to foreign governments and foreign corporations in business dealings with regard to Iran sanctions legislation,” the aide said.