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Secretary of Defense Chuck Hagel sidestepped questions on Thursday about numerous Pentagon contractors who are currently seeking to begin business with Iran.
At least 13 major international companies have said in recent weeks that they aim to reenter the Iranian marketplace over the next several months. The companies have received Pentagon contracts totaling well over $107 billion, according to a Washington Free Beacon analysis that tracked defense contracts awarded since fiscal year 2009.
Lawmakers have expressed shock over the revelation that companies receiving billions in taxpayer funds would seek to do business with Iran and have demanded that these companies be forced to choose between doing business with America or doing it with Iran.
When questioned about the matter during a congressional hearing on Thursday, Hagel avoided direct answers.
“Should companies that do business with the Department of Defense also be doing business with Iran?” asked Rep. Doug Lamborn (R., Colo.), a member of the House Armed Services Committee.
Hagel responded by saying that the United States has “sanctions in place … to address that. And companies would violate those sanctions if they were doing that kind of business with Iran.”
However, under the interim nuclear accord signed last year, companies have a temporary window to conduct certain types of business with Iran, giving it a chance to cash in on lucrative deals.
“One news report has indicated that companies doing business with the Department of Defense to the tune of $100 billion are looking at doing more business with Tehran now that the, sort of, floodgates have been opened,” Lamborn said. “And some people would disagree with that term, floodgates, since this recent deal with Iran. But that's how some people out there in the business world are looking at it.”
Hagel said that “no floodgates have been opened.”
Asked after the hearing if he was satisfied with Hagel’s answers, Lamborn said that Hagel is putting too much faith in a sanctions regime that is already collapsing.
“He’s putting a lot of faith in the sanctions program that the Obama administration has in place,” Lamborn said. “Unfortunately, that program has been considerably weakened ever since the so-called agreement. I’m not convinced we’re really looking closely enough at how major companies in some cases might be wanting to play on both sides of the fence.”
Lamborn criticized the administration for not publicly addressing the issue and drawing a line for Pentagon contractors.
“I don’t see anybody being called out, and I don’t see any warnings being issued to any companies,” he said. “I just don’t see anything happening.”
This silence sets a dangerous precedent, Lamborn said.
“I’ve tried to call out some people by name and maybe bring them to an awareness that if they operate in an inconsistent way they’re going to have to have consequences,” he said.
Lamborn went on to note that some in the Obama administration believe that it is wise to get Tehran hooked on outside cash.
“There are some in the administration who have the belief they want Iran to start doing a lot of business and get hooked on the money,” he said. “I think that’s a huge gamble that hasn’t been proven. What has worked in the past to bring them to the table has been strong sanctions, not some kind of money transfusion that bribes people.”
Many of the companies said to be exploring business opportunities in Iran have had highly lucrative DoD contracts.
These companies include Boeing and General Electric—which have DoD contracts worth at least $87.9 and $12.5 billion respectively—as well as the Italian oil company Eni, Merck, Safran, Vitol, Bosch Rexroth, Sanofi Pasteur, and AVL.