Statements on Introduced Bills and Joint Resolutions

STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

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Mr. WYDEN. Mr. President, in his inaugural address and again in the state of the union President Bush promised to take on tyranny around the world. There's one corner of the world where tyranny is the currency of the realm, and where one country stands head and shoulders above the rest for its record of brutality towards its own people and hostility toward its neighbors. That country is Iran.

The lifeblood of the Iranian economy is oil. Oil accounts for 80 percent of Iran's export earnings, almost half of the government's budget and nearly one-fifth of the country's GDP. Every time the price of crude oil rises $1 a barrel, Iran gains about $900 million in export revenues. Crude oil prices rose around $15 over the course of 2004, giving Iran a hurricane-force revenue windfall last year.

Although most U.S. energy companies ceased dealing with Iran when President Clinton imposed sanctions against the regime in 1995, some appear unable to resist the lure of investing in a country that holds 10 percent of the world's proven oil reserves, is OPEC's second largest producer and has the world's second largest natural gas reserves, behind Russia.

In June of last year, for example, a grand jury in the U.S. issued a subpoena to Halliburton seeking information on the work in Iran of its Cayman Islands subsidiary. The Department of Justice has an ongoing criminal investigation into whether Halliburton violated any laws by trading with Iran through a subsidiary. Just a few days ago, Halliburton's CEO announced the company would withdraw its employees from Iran and end its business activities there when it fulfills its ongoing contracts, including a $35 million gas drilling project it just won last month. GE just made a similar announcement about its subsidiary's activities in Iran.

Foreign companies seeking profits from Iran's energy reserves do not have to worry about such impediments as economic sanctions. Indeed, their governments often bless and sometimes lend Them a hand to help win lucrative contracts. When U.S.-based Conoco had to terminate its $550 million contract to develop some offshore oil and gas fields in 1995, France's Total and Malaysia's Petronas jumped in. In March 1999, France's Elf Aquitaine and Italy's Eni/Agip won a $1 billion contract for a secondary offshore recovery program. In April 1999, TotalFinaElf teamed up with Eni and Canada's Bow Valley Energy to develop an offshore oil field. Shell, BP and Lukoil are also frequently mentioned as being in the chase for Iranian oil and gas contracts. The Economist Intelligence Unit estimates Iran has attracted $15-$20 billion in combined foreign investment in hydrocarbons.

Not only are foreign companies heavily invested in Iran's hydrocarbon sector, but Iran ships some 2.6 million barrels of oil a day to Japan, China, South Korea, Taiwan and Europe.

If President Bush is serious about chasing down tyrants around the globe, he should use every possible means. The legislation I am introducing today, the Investor in Iran Accountability Act, would give the President a powerful tool by holding accountable those who lend the Iranian regime crucial financial assistance by investing in its energy sector.

First, the legislation would shine a spotlight on those American companies, like Halliburton, which have used the loophole in the Iran sanctions act to continue to do business with Iran in the energy sector. The bill would require the Treasury Secretary to publish a list of the United States companies whose subsidiaries continue to do energy deals with Iran. While I personally do not believe there should be any more backdoor deals with Iran, my view is that an informed American public is best equipped to hold these companies accountable.

Second, the legislation would hold up to the light of public accountability those foreign companies that have more than $1 million invested in Iran's energy interests by requiring the Treasury Department to publish a list of those companies as well. Third, the legislation would give American investors for the first time an idea of those U.S. pension and retirement plans, mutual funds and other financial instruments that hold investments in these U.S. and foreign companies by requiring the Treasury Department to publish a list of all public and private U.S. financial interests that hold more than $100,000-worth of investment in these companies. Finally, because unilateral economic sanctions penalize American companies and open the field to foreign companies without inflicting any real economic pain on Iran, the bill directs the President to negotiate an end to foreign investment in Iran's energy sector with the appropriate foreign governments.

Some of my colleagues will remember that in the late 1970s and 1980s Congress struggled with ways to force the South African regime to abandon apartheid. One of the most effective tools in that fight was a public armed with information about which companies were doing business there so that American shareholders could choose to place their money elsewhere. The movement by American investors to rid their portfolios of holdings in companies that persisted in doing business with the apartheid regime in South African proved to be one of the most potent tools in the fight to end apartheid. This legislation will arm American investors with knowledge about which U.S. and foreign companies are supporting Iran's critical energy sector and which U.S. entities hold investments in them. With this knowledge, it is my hope that American investors will choose not to aid and abet the Iranian regime by continuing to hold shares in companies or funds that invest in the Iranian oil and gas sector.

The Iranian regime has made no secret of its desire to attract billions of dollars-worth of foreign investment, particularly to the energy sector. It even adopted a law in January 2003 specifically designed to attract foreign investors. Iran, which has recently discovered some new reserves of 30 billion barrels of crude oil, has ambitious plans to expand oil production from around 3.9 million barrels a day in 2004 to 5 million barrels a day in 2009. But with deteriorating equipment and the natural decline rate of existing wells, it simply cannot achieve those goals without significant foreign help.

In closing, I would point out that the Securities and Exchange Commission has determined that significant corporate operations in countries subject to U.S. economic sanctions, such as Iran, can represent a material risk to United States investors and that such investments should be properly disclosed. My bill would make sure this information is disclosed to the American public.

I ask unanimous consent that the text of the bill be printed in the RECORD.

There being no objection, the bill was ordered to be printed in the RECORD, as follows:

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