Obama and sanctions: How much leeway does he need?


My colleague Zach Silberman at the Washington Jewish Week has a post up today on President Obama’s signing statement on the Defense Authorization Act, and how he declares himself able to ignore its Iran sanctions component.

The question is, after months of tussling with Congress for exemptions to the Iran sanctions amendment — a good few of which were written into law — why does President Obama need to give himself the blanket exemption?


The statement accompanying the enactment of a law, once a matter of ceremony, has become, since the Reagan administration, a vehicle for a president to reserve the right to ignore a law passed by Congress. George W. Bush reputedly was its most enthusiastic proponent, although this is a matter of controversy (see this Wikipedia article, which wildly varies Bush’s number of signing statements from paragraph to paragraph.)

In any case, mindful of the outrage that Bush’s alleged overuse provoked, Obama campaigned against the use of signing statements, saying he would reserve them only for laws he determined unconstitutional.

And so he does through much of the signing statement on the Defense Authorization Act, including for section 1245, the amendment creating sanctions on third parties dealing with the Central Bank of Iran:

Sections 1235, 1242, and 1245 would interfere with my constitutional authority to conduct foreign relations by directing the Executive to take certain positions in negotiations or discussions with foreign governments.

So, here are some of the wiggle-room provisions in the law as passed. (All of these provisions have reporting requirements, but more on that in a minute.)

Here’s the Act (PDF); scroll down (waaaay down) to section 1245. (I’ve not counted the boilerplate humanitarian exemptions — the argument here is about presidential prerogative.)

–(d) (4) (A), (B) and (C) essentially make imposing the sanctions conditional on whether world oil markets can withstand them, "that there is a sufficient supply of petroleum and petroleum products from countries other than Iran to permit a significant reduction in the volume of petroleum and petroleum products purchased from Iran by or through foreign financial institutions."

–(d) (4) (D), following immediately on the above, allows the president to withhold sanctions if a country is making some cuts, but not entirely pulling out of Iran: "…the country with primary jurisdiction over the foreign financial institution has significantly reduced its volume of crude  oil purchases from Iran during the period …"

–(d) (5), following immediately on the above, is a broad national security waiver.

Additionally, there was some last-minute tussling in December, with threats by the Obama administration to veto the law. That produced this language in  (d) (1) (A) (I’ve bolded the White House-requested language):

…shall prohibit the opening, and prohibit or impose strict conditions on the maintaining, in the United States  of a correspondent account or a payable-through account  by a foreign financial institution that the President determines has knowingly conducted or facilitated any significant financial transaction with the Central Bank of Iran…

Now here’s a Washington fun fact: When I reported on this a few weeks ago, everyone I spoke to — congressional and administration side — agreed that allowing the president to "impose strict conditions" on an account with a party that worked with Iran, as opposed to prohibiting it outright, granted him greater leeway — but no one knew what that meant, precisely. Your government at work.

That said, the other provisions are fairly clear: The president can say "the markets won’t stand it" (and the oil markets are volatile enough that he could probably get away with saying it just about anytime); he could say "give X country time to pull out, it’s already reduced its Iran business;" and he’s got the all-purpose national security waiver. And the "strict conditions" thing, whatever it means.

So why does the president need to give himself the extra cover in the signing statement?

The White House, pressed by Zach, referred him to this separate statement it issued Saturday, the day of signing, which is weird. When I got the same statement, I read it as declaring an intent to use the exemptions written into the bill, not to create a whole new exemption:

The provisions signed into law today have that needed flexibility, and we are now working with partners to be in a position to most effectively implement it.

So here are some theories:

— Face value: The Obama administration sees the congressional micromanaging as intrusive to the point of unconstitutional; he may or may not apply the sanctions as written, but wants it on the record that the law is unconstitutional.

–Nuisance value: The Obama administration sees the reporting requirements for the provisions — every six months in the case of the oil market exemption, every four months in the case of the national security waiver — as burdensome. 

–It’s an election, dummy: The president wants to be able to ignore the sanctions and not explain why in an election year. (Sen. Mark Kirk, R-Ill., an author of the sanctions amendment, tells Zach it won’t work, saying Obama "risks overwhelming opposition in the Congress.")

Or all of the above.

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