Shipping with the Enemy
BY: Follow @Kredo0
A U.S. shipping company with ties to the Iranian oil industry has spent years donating money mostly to Democrats, as have family members of one of its founders.
Overseas Shipholding Group, Inc. (OSG), the world’s second largest publicly traded oil tanker company, recently capitulated to public pressure and said it would cease business dealings with Iran. Until last week, however, several of the company’s crude oil vessels were docking at Iranian ports, thereby skirting U.S. sanctions meant to limit American companies’ interaction with the regime, Bloomberg reported.
Members of OSG’s founding family—as well as its political action committee—are prominent financiers of the Democratic Party, donating nearly $1 million to various candidates and causes over the past decade. Their disbursements raise questions about the prevalence of Iran-tainted money in the political sphere.
Together, the Recanati clan—whose now-deceased patriarch Raphael Recanati co-founded the company and which still owns a significant portion of OSG’s stock—has contributed nearly $1 million to prominent Democrats such as President Barack Obama and Secretary of State Hillary Clinton, and to organs such as the Democratic National Committee.
Michael Recanati, the son of Raphael, is perhaps the most prolific Democratic funder giving more than $805,000 to Democratic candidates and organizations over the last decade, public documents reveal.
Recanati donated $4,600 to the Obama Victory Fund in 2008, for instance, and more than $178,000 to the Democratic Senatorial Campaign Committee between 2002 and 2006.
Two of co-founder Raphael Recanati’s family members—Ariel and Oudi—remain on OSG’s board of directors, though they’ve mostly refrained from contributing to political candidates. Ariel Recanati regularly donates to OSG’s PAC, however.
OSG’s PAC donations have been more bipartisan, though they still lean Democratic.
From 2006 to 2012, for example, OSG’s PAC doled out at least $118,200—or 58 percent of its donations—to a slew of prominent Democrats, including Sens. Harry Reid (D-Nev.), Charles Schumer (D-N.Y.), and Jay Rockefeller (D-W.Va.), according to CQ’s MoneyLine, which tracks money in politics.
OSG has already disbursed about $7,000 in the current election cycle to several Democratic member of Congress. Last cycle it gave nearly 71 percent of its contributions—or $24,000—to 16 Democrats, according to public records.
In 2008, 71 percent of the companies’ PAC money, or around $35,000, also went to Democrats.
Republicans, too, have received a sizable chunk of OSG’s PAC money over the years. House Speaker John Boehner (R-Ohio) received $2,500 from OSG last year, as did Sens. Olympia Snowe (R-Maine) and David Vitter (R-La.), among others.
Despite increasingly severe sanctions against Iran, OSG is on record as having received more than $200 million in government credit guarantees last year. Under the U.S. Maritime Administration’s Title XI program–which Government Accountability office has cited as weak—tanker companies like OSG are eligible to receive “full faith and credit” guarantees.
Documents show that OSG has requested an additional $200 million from the administration this year. The deadline for approval of that guarantee is this Saturday, raising questions about whether OSG’s decision to get out of the Iran business could play into the administration’s funding decision.
One Republican source questioned the judgment of those lawmakers who received money from OSG during the years that it was doing business in Iran.
“Iran is like the plague in today’s politics—if I was a campaign, I’d dump those contributions yesterday,” said a senior GOP adviser who closely tracks the issue of Iran.
OSG has a long history of dodging U.S. sanctions on Iran, and has admitted in government documents that its business ties to the country could pose a problem with investors.
“From time to time, vessels in OSG’s fleet call on ports located in countries subject to sanctions and embargoes imposed by the U.S. government and countries identified by the U.S. government as state sponsors of terrorism, such as Syria and Iran,” OSG wrote in a 2008 SEC filing. “Although these sanctions and embargoes do not prevent OSG’s vessels from making calls to ports in these countries, potential investors could view such port calls negatively, which could adversely affect the company’s reputation and the market for its common stock.”
OSG, like other shipping firms, pools its vessels with a management company called Tankers International LLC, reports show. OSG ships operating under the Tankers umbrella reportedly fly the Marshall Islands flag for regulatory purposes, meaning they have registered in that country as a way to skirt current U.S sanctions.
The company decided last week that it would halt its business dealings with Iran after the European Union decided to pass sanctions on the country’s largest ports.
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