Trump Administration Battles New Sanctions on Russia

The Trump administration is quietly fighting a new package of sanctions on Russia, The Daily Beast has learned. A Trump State Department official sent a 22-page letter to a top Senate chairman on Tuesday making a wide-ranging case against a new sanctions bill. 

Sen. Lindsey Graham—usually a staunch ally of the White House—introduced the legislation earlier this year. It’s designed to punish Russian individuals and companies over the Kremlin’s targeting of Ukraine, as well as its 2016 election interference in the U.S., its activities in Syria, and its attacks on dissidents. 

Graham said the legislation’s aggressiveness means it is “the sanctions bill from hell,” per Yahoo Finance. Trump World, meanwhile, says it is a mess. 

The administration’s letter says it “strongly opposes” the bill unless it goes through a ton of changes. It argues the legislation is unnecessary and that it would harm America’s European allies–potentially fracturing transatlantic support for current U.S. sanctions on Russia. The bill “risks crippling the global energy, commodities, financial, and other markets,” the letter says, and would target “almost the entire range of foreign commercial activities with Russia.”

The Trump administration also argues that the bill would sanction Russian companies for starting their own new energy developments in Russia. And it argues the sanctions could target American banks operating in Russia and harm American asset managers. 

A State Department spokesperson declined to comment on the letter but said, “The Administration fully shares the goal of deterring and countering Russian malign influence and aggression.”

Despite Trump’s strong opposition, the bill passed out of the Senate Foreign Relations Committee on Wednesday morning. Five senators opposed it, all Republicans: Chairman Jim Risch, Sen. Rand Paul, Sen. Johnny Isacson, Sen. John Barrasso, and Sen. Ron Johnson. 

The bill, called the “Defending American Security from Kremlin Aggression Act of 2019” (DASKA) would level new sanctions against Russian oligarchs, against its banking sector, and against its sovereign debt (which the powerful California Public Employees Retirement System has hundreds of millions of dollars invested). It would also open the door to sanctioning Russia’s ship-building industry in response to the Kremlin’s capture of Ukrainian sailors and ships as they sailed through the Kerch Strait late last year. And it would sanction some crude oil development projects in Russia, as well as energy projects outside the country backed by Russian state-owned entities. 

It would also aim to bring more transparency to purchases of high-end real estate, which many foreign nationals use to launder money into the U.S. And it would require that the State Department and the Intelligence Community report to Congress every 90 days on whether or not the Kremlin is meddling in U.S. elections. 

That last provision drew pointed criticism from the Trump administration, which said it is “designed for failure.” It “seems impossible” to certify that the Kremlin isn’t meddling in U.S. elections, the letter says, noting that the executive branch always opposes requirements that it prove something isn’t happening.  

The letter also includes a line that could be read as a veiled threat to the Kremlin, and which refers to the administration’s current ability to issue new sanctions. 

“The United States can apply much more economic pain using this powerful range of authorities–and the Administration will not hesitate to do so if Russia’s conduct does not demonstrably and significantly change,” it says. 

Business groups, including the Chamber of Commerce and the American Petroleum Institute, have also raised concerns about the bill. The Chamber said Congress should “refine it further,” while API called for outright opposition, according to Yahoo Finance. 

Democrats and Republicans cheered the passage of the legislation through the committee. “I am committed to working with my colleagues to improve this legislation, but it must be strong to be meaningful,” Graham said in a statement. 

The next step will be a vote on the Senate floor; it is unclear if or when that will happen. 

The legislation is moving as Trump stares down an impeachment vote. The House of Representatives spent Wednesday afternoon debating whether or not to vote to impeach him. Trump’s relationship with Ukraine is at the center of the process; his administration pressured Kyiv to make an announcement on investigations that would have benefited Trump politically. That pressure came while Trump quietly directed his subordinates to withhold military aid that Congress had promised to send to Kyiv. And Trump’s European Union Amb. Gordon Sondland told Congress that the administration specifically conditioned a White House visit for Ukrainian President Volodymyr Zelensky on his announcement of probes into the Bidens and into claims that Ukraine interfered in the 2016 election. 

And Trump’s relationship with the Kremlin has generated acute concerns on both sides of the Atlantic. Ukrainian officials spent the weekend of Dec. 7 watching Twitter in expectance Trump would announce support for them before they entered peace talks with Russian President Vladimir Putin. Instead, they got radio silence–and days later, Trump welcomed Russia’s foreign minister to the White House. 

And Russia’s enthusiastic interference in the 2016 election–which the Intelligence Community concluded was designed to help Trump win–precipitated Special Counsel Robert Mueller’s investigation. Trump spent much of his presidency railing against Mueller and trying to get him fired. Democrats considered impeaching him over those efforts, but House Leadership ultimately demurred. 

But while Trump himself has long made positive comments about Russia and Putin, his administration sent lethal aid to Ukrainian forces battling Kremlin-backed separatists in the eastern part of their country–a step the Obama administration declined to take.

“I have been far tougher on Russia,” he wrote in a rambling letter to Speaker of the House Nancy Pelosi on Tuesday, “than President Obama ever even thought to be.”