U.S. enriches firms doing business with Iran

http://www.msnbc.msn.com/id/35739690/ns/world_news-the_new_york_times/

By Jo Becker and Ron Nixon
updated 1:58 p.m. ET, Sat., March. 6, 2010

The federal government has awarded more than $107 billion in contract payments, grants and other benefits over the past decade to foreign and multinational American companies while they were doing business in Iran, despite Washington’s efforts to discourage investment there, records show.

That includes nearly $15 billion paid to companies that defied American sanctions law by making large investments that helped Iran develop its vast oil and gas reserves.

For years, the United States has been pressing other nations to join its efforts to squeeze the Iranian economy, in hopes of reining in Tehran’s nuclear ambitions. Now, with the nuclear standoff hardening and Iran rebuffing American diplomatic outreach, the Obama administration is trying to win a tough new round of United Nations sanctions.

But a New York Times analysis of federal records, company reports and other documents shows that both the Obama and Bush administrations have sent mixed messages to the corporate world when it comes to doing business in Iran, rewarding companies whose commercial interests conflict with American security goals.

Many of those companies are enmeshed in the most vital elements of Iran’s economy. More than two-thirds of the government money went to companies doing business in Iran’s energy industry — a huge source of revenue for the Iranian government and a stronghold of the increasingly powerful Islamic Revolutionary Guards Corps, a primary focus of the Obama administration’s proposed sanctions because it oversees Iran’s nuclear and missile programs.

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In recent months, a number of companies have decided to pull out of Iran, because of a combination of pressure by the United States and other Western governments, “terrorism free” divestment campaigns by shareholders and the difficulty of doing business with Iran’s government. And several oil and gas companies are holding off on new investment, waiting to see what shape new sanctions may assume.

The Obama administration points to that record, saying that it has successfully pressed allied governments and even reached out directly to corporate officials to dissuade investment in Iran, particularly in the energy industry. In addition, an American effort over many years to persuade banks to leave the country has isolated Iran from much of the international financial system, making it more difficult to do deals there.

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