Upping the Ante

Obama Administration Preps New Sanctions Against Russia

The Obama administration had been holding off on new Russia sanctions, but with Russian troops now in eastern Ukraine, the U.S. government is moving fast to punish Putin.

Gleb Garanich/Reuters

The Obama administration is moving quickly to levy new sanctions against Russia, hoping to stop what the U.S. government now sees as a Crimea-style incursion by unmarked Russian troops in several cities in Eastern Ukraine. But so far, America and its European allies can’t agree on how to hit the Vladimir Putin regime for its latest move onto Ukrainian territory, senior Obama administration officials tell The Daily Beast.

This weekend, pro-Russian gunmen seized government buildings in the eastern Ukrainian city of Sloviansk, and ringed the town with barricades. It’s a scene that’s been repeated in towns across the region, and it’s prompted the Kiev government to send the equivalent of their FBI in an as yet unsuccessful effort to retake control.

Moscow attempted to cast these attacks as uprisings by local Ukrainians. But it’s a claim few others are buying. The U.S. State Department said in a Saturday statement that the strikes were “orchestrated and synchronized” by the Russian government and were ”similar to previous attacks in eastern Ukraine and Crimea.” The State Department added that the militants had specialized Russian weapons and wore the same uniforms as the Russian forces that invaded Crimea. The State Department on Sunday also issued fact sheets with evidence of Russian involvement in the eastern Ukraine violence.

On Friday, NATO’s Supreme Allied Commander Gen. Philip Breedlove posted photos to his personal blog of what he claimed were Russian forces operating inside Ukraine in uniforms without insignia. As the Daily Beast first reported last month, the U.S. intelligence community since late February has seen Russian special operations officers infiltrating throughout eastern Ukraine.

Behind the scenes, there’s shock and alarm inside the Obama administration about the recent actions by Russian forces. A senior administration official told The Daily Beast Sunday that the thinking inside the administration had been to wait until this Thursday before moving forward with any new sanctions. That’s the day U.S., E.U., Russian, and Ukrainian governments are scheduled to meet in Geneva.

But given the new violence, the Obama administration has now moved to ready sanctions as early as Tuesday, the official said, cautioning that no final decision has been made. State Department, White House, and Treasury Department officials have been reaching out to their European counterparts over the weekend to persuade them to join a new sanctions regime. The E.U. Foreign Ministers will meet in Brussels Monday.

The Obama administration is reevaluating the situation on daily basis, revising their previous assumption that Russia would not interfere so blatantly in eastern Ukraine ahead of the upcoming diplomatic conference.

“People were very alarmed,” the official said, noting that “the people who study Russia weren’t as surprised.”

There is still some internal disagreement inside the Obama administration over whether to proceed with sanctions against broad sectors of the Russian economy or with more targeted sanctions against Russian politicians, oligarchs, and perhaps some of the institutions those politicians and oligarchs are connected to. So far, the U.S. has sanctioned 31 Russian individuals and one Russian bank. U.S. officials believe the sanctions against Putin’s business associates have had some effect and could be expanded.

There is also still a gap between the American and European positions on how to punish Moscow financially.

“The U.S. government is ready to go, we have all kinds of options that have been developed,” the official said. “The European view is that sectorial economic sanctions should be limited to respond to an outright Russian military invasion of eastern Ukraine.”

After the Crimea invasion, the U.S. government implemented visa bans and asset freezes on 7 Russian officials and 4 Ukrainian officials, but those officials scoffed at the move. Days later, new U.S. sanctions targeted oligarchs close to Vladimir Putin and one Russian bank. Putin responded by issuing entry bans on 11 U.S. officials, including Senate Majority Leader Harry Reid, Sen. John McCain, and some senior White House staffers.

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Speaking in Brussels March 26, President Obama warned that if Russia stayed on its current course, more sanctions would be imposed and the toll on the Russian economy would increase. Independent analyses by firms operating inside Russia have warned that any sanctions that restrict Russian access to global financial markets or go after Russian trade or investment practices would be disruptive, not only to the Russian economy, but to the European economy as well.

U.S. Ambassador to the U.N. Samantha Power warned Sunday that new sanctions against Russia were on the way, including possibly sanctions against broad sectors of the Russian economy, such as the energy, banking and mining sectors. Power directly blamed the new violence on Moscow.

“It has all the tell-tale signs of what we saw in Crimea,” Power told ABC News Sunday. “It's professional, it's coordinated. There's nothing grass roots seeming about it… And if actions like the kind that we've seen over the last few days continue, you're going to see a ramping up of those sanctions.”

The White House and State Department issued similar warnings Saturday and Secretary of State John Kerry spoke Saturday with Russian Foreign Minister Sergei Lavrov to convey the threat that additional sanctions were forthcoming. Vice President Joe Biden will travel to Kiev Tuesday.

Also on Tuesday, Breedlove, the NATO commander, is scheduled to present a plan to redeploy more military assets closer to Ukraine and Russia as a show of deterrence. Breedlove has quietly protested the Obama administration's cautious approach to aiding Ukraine's interim government during the crisis and has supported more intelligence sharing with Ukraine and providing its military with more secure communications equipment.

Admiral Frank Pandolfe, the director of plans for the military’s joint chiefs of staff, said last week that Breedlove’s plan would consider “increasing military exercises, forward deploying additional military equipment and personnel, and increasing our naval, air, and ground presence.”

With additional reporting by Eli Lake