John Kerry's Awkward Push For Investment In Iran : Parallels The secretary of state negotiated the nuclear deal and wants it to work. He recently went to Europe to encourage banks there to invest in Iran.
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John Kerry's Awkward Push For Investment In Iran

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John Kerry's Awkward Push For Investment In Iran

John Kerry's Awkward Push For Investment In Iran

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Secretary Of State John Kerry and his team are working hard to keep the Iran Nuclear Deal on track - perhaps too hard, critics say. The Obama administration sees the agreement as key to its foreign policy legacy. Some in Congress say Kerry is going too far by helping Iran reap the economic benefits of the arrangement. NPR's Michele Kelemen has more.

MICHELE KELEMEN, BYLINE: At a testy congressional hearing today, the House Foreign Affairs Committee chairman, Republican Ed Royce, complained that the Obama administration is walking on eggshells when it comes to Iran and even acting as Iran's business development promoter.

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ED ROYCE: The State Department has taken it advocacy for Tehran to a new and disturbing level by trying to persuade major non-U.S. banks that doing Iran-related business is not only permitted but is actually encouraged.

KELEMEN: Secretary of State John Kerry met with European bankers earlier this month to persuade them that, as he put it, legitimate business is available to them in Iran. That's a case other officials have been making for months. The administration argues it has to do this to make sure Iran sees the benefits of cutting back its nuclear program.

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ADAM SZUBIN: Since Iran is kept hit its end of the deal we must uphold our --

KELEMEN: That's Adam Szubin, a Treasure Department official who oversees sanctions. He told the House hearing that before the deal, Iran was a few months away from having enough nuclear material for a bomb. Now it's a year away. In return, the U.S. has suspended nuclear-related sanctions.

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SZUBIN: Iran is already seeing benefits under this deal. It has been able to open new bank accounts. It's been able to gain access to billions of dollars in reserves, and its oil exports to Europe have recovered to about one half of their pre-sanctions levels.

KELEMEN: There are still non-nuclear-related sanction on Iran for things like human rights abuses and links to terrorists groups. And Tehran is blaming the U.S. for this slow pace of investment in the country.

But many U.S. lawmakers say that's not America's problem. At a Senate Banking Committee hearing yesterday, Massachusetts Democrat Elizabeth Warren pointed out there are many reasons companies are wary of investing in Iran.

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ELIZABETH WARREN: If Iran complies with its obligations under the nuclear deal, they will get the sanctions relief that they bargained for. But Iran has a long history of money laundering, terrorist financing, corruption, which are among the reasons that Iran remains a pariah state in the eyes of the international community.

KELEMEN: So Senator Warren posed this question to a former Treasury Department official, Elizabeth Rosenberg, who was testifying.

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WARREN: Ms. Rosenberg, instead of blaming the United States for its failure to emerge from economic isolation, what steps should Iran be taking if it wants to become a responsible member of the international financial and commercial system?

ELIZABETH ROSENBERG: Thank you for the question. To begin with, it could stop funding terrorism.

WARREN: Yeah. That would be a good one.

KELEMEN: Rosenberg, who's now with the Center for a New American Security, says Iran's provocative behavior scares off investors. She's also encouraging Iran to work with international banking regulators who set the standards to protect financial institutions from money laundering.

Another expert at the Senate hearing was Juan Zarate, a former Treasury Department official who now chairs an advisory firm called Financial Integrity Network. He says Iran has to clean up its act.

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JUAN ZARATE: In putting the onus on Iran to resolve these issues themselves, to explain themselves to the market - that actually could promote reforms internally.

KELEMEN: Zarate argues that the Obama administration's lobbying efforts to help Iran's economy is doing the opposite - letting Iran off the hook. Michele Kelemen, NPR News, the State Department.

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