Senator Rips Mnuchin for Backpedaling on Manafort-Linked Russia Sanctions
Treasury Secretary Steven Mnuchin has hinted he’s rethinking the decision to target Oleg Deripaska. Bob Menendez isn’t pleased.
The top Democrat on the Senate Foreign Relations Committee is blasting Treasury Secretary Steven Mnuchin for entertaining the idea of lifting sanctions on a Russian aluminum company with ties to former Trump campaign manager Paul Manafort.
In a letter sent Wednesday, Sen. Bob Menendez (D-NJ) urged Mnuchin to maintain the sanctions that were slapped on Russian oligarch Oleg Deripaska in April, arguing that they are a necessary aspect of U.S. efforts to punish Russian President Vladimir Putin and his inner circle for Moscow’s interference in the 2016 election.
“I welcomed these designations in light of Mr. Deripaska’s relationship with the companies and would strongly oppose any effort to remove the sanctions unless and until Mr. Deripaska divests from and relinquishes control of both companies,” Menendez wrote in a letter obtained by The Daily Beast.
The sanctions on Deripaska were conceived after Mnuchin inadvertently told Menendez during a Senate Banking Committee hearing in January that the Treasury Department would be unveiling sanctions based on its classified report on Russian oligarchs. Mnuchin’s remarks during that hearing—which were made as Menendez was cornering him about the administration’s slow implementation of Russia-related sanctions—forced Treasury officials to scramble to produce something that would match the secretary’s under-oath statement.
But congressional sources told The Daily Beast in September that the Treasury Department did not follow proper protocols when it formally issued the sanctions against Deripaska in April. Among other things, sources said that the sanctions were implemented without proper scrutiny of Deripaska and a full evaluation of the global impact. The penalties, which also affected Deripaska’s aluminum company Rusal, have roiled international markets and caused aluminum prices to skyrocket. European leaders have pleaded with the U.S. to lift them.
Citing the adverse economic impact, Mnuchin acknowledged earlier this year that the department was reconsidering its decision. “The objective was to impact the oligarchs,” he said, “not to impact the hardworking people of Rusal as a result of the sanctions.”
In his letter, Menendez took issue with the potential policy reversal and outlined a series of criteria that should be met before those sanctions are reduced or scrapped entirely. The Treasury Department, the senator said, should not lift the existing sanctions until Deripaska “divests from and relinquishes control of” Rusal and EN+, a separate energy company Deripaska controls.
The New Jersey Democrat has long favored strict sanctions targeting Moscow. In August, he and Sen. Lindsey Graham (R-S.C.) unveiled legislation dubbed the “sanctions bill from hell” that would, among other actions, sanction the Russian energy sector and its sovereign debt. Menendez has also opposed efforts to waive sanctions on the Russian intelligence and defense sectors, sanctions which have the effect of penalizing U.S. allies for continuing to buy Russian weapons.
“The goal is not to put EN+ or Rusal out of business given the global implications for the aluminum industry and the potential impact on our close allies in Europe,” Menendez wrote. “However, the Treasury Department must take all possible measures to ensure that Mr. Deripaska divests from and relinquishes his control of both entities and that he no longer benefits in any way from them.”
When the Treasury Department initially sanctioned Deripaska, it noted that he “has been investigated for money laundering, and has been accused of threatening the lives of business rivals, illegally wiretapping a government official, and taking part in extortion and racketeering.”