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Waters to Mnuchin: This is Your Excuse For Not Having Implemented the Law?

At a full Committee hearing of the House Committee on Financial Services, Ranking Member Maxine Waters (D-CA), pressed Treasury Secretary Steven Mnuchin on the Trump Administration’s inaction on the Russia sanctions passed with broad bipartisan support by Congress in 2017 to punish Russia for interfering in our democracy.

Section 231 of the Countering America’s Adversaries Through Sanctions Act (CAATSA) requires sanctions on persons engaging in transactions with the intelligence or defense sectors of the Government of the Russian Federation “on and after” January 29, 2018.

Despite this deadline, no such sanctions have been imposed, no waivers have been granted, and, according to Secretary Mnuchin’s previous testimony before the Senate Banking Committee, no delays have been issued.

In an exchange with Ranking Member Waters, Secretary Mnuchin attempted to deflect questions on Section 231, and failed to acknowledge that he is required to play a role in enacting sanctions under that section of the law.

Watch the exchange between Ranking Member Waters and Secretary Mnuchin:

The transcript of their exchange is below.

Waters: Thank you very much. Mr. Chairman, pursuant to clause D4 of Committee Rule 3, I request recognition to question the witness for an additional five minutes upon the conclusion of the time allotted to me under the five-minute rule.

Hensarling: The Ranking Member is recognized for ten minutes.

Waters: Thank you very much.

I’d like to ask first about the subject of my most recent letter, which is your Department’s role in Section 231 of the Countering America’s Adversaries Through Sanctions Act. Congress passed this law on a broadly bipartisan basis with the clear objective of punishing Russia for its brazen attack on our democracy.

Mr. Secretary, do you believe our intelligence agencies as they have said to us that Russia did hack into our DNC and undermine our democracy. Do you believe that to be true?

Mnuchin: Again, I will broadly say, I do believe in the intelligence assessment. I want to refrain from comments specific that are classified. But yes…

Waters: Thank you.

Mnuchin: …I broadly believe in the assessments.

Waters: Even the findings section of the law explicitly references the intelligence community’s finding that Russian President Vladimir Putin ordered an influence campaign in 2016 aimed at the United States presidential election. The findings also recognize the intelligence community's warning that Moscow will apply lessons learned from its Putin-ordered campaign, aimed at the U.S. presidential election, to future influence efforts worldwide, including against U.S. allies and their election processes. Do you believe that to be true?

Mnuchin: I have no reason not to believe it to be true.

Waters: So, given the importance of the law’s very purpose, I'm wondering why this Administration continues to let key deadlines in the Act come and go without taking any action to implement the Act and punish Russia for its crimes against the American people.

Now, one provision of the law, which the Administration has ignored is Section 231 of the Act. This section requires that the President sanction persons he has determined to have engaged in a significant transaction with Russia’s defense and intelligence sectors on and after January 29, 2018. As you know, the law also allows the President to waive or delay these sanctions. However, to date, this Committee has received no indication that any sanctions have been imposed, waived or delayed. And, last week, when you testified before the Senate Banking Committee, you stated that you “did not waive or delay” sanctions.

Section 231 of CAATSA is clear that the President has six months from the date of enactment to determine which persons are engaged in sanctions [transactions] with the Russian defense and intelligence sectors. After six months, the President must impose sanctions on such persons, or waive or delay imposition of the sanctions.

Yet, despite the fact that the deadline for action has come and gone, no sanctions have been imposed, waived or delayed pursuant to Section 231. How can you explain this?

Mnuchin: The section that I believe you are referring to has been delegated to the State Department, so I can’t comment for Secretary Tillerson on that. I can comment on the portion that we were responsible for, which was the oligarch report that we did deliver on time and as I testified in the Senate, there will be sanctions coming out of that report. And, again I want to commend the work that was done on the Intelligence Committee on the classified version.

Waters: Who is responsible for delegating what was passed by an overwhelming majority of this House to the State Department?

Mnuchin: The President was.

Waters: So, the President decided that despite the fact that, in the law that we passed --delegated responsibility to Treasury, that -- he decided that he wanted it to be delegated to the State Department, rather than Treasury? And this is your excuse for not having implemented the law? Is that correct?

Mnuchin: No, it's not my excuse. And, again, I believe -- but we would be happy to sit down with you and go through the details of this -- the President had the authority to delegate within that as he chose fit. Again, the portion that you’re referring to was delegated to the State Department. The other portion was delegated to us.

Waters: But, the final conclusion is that nothing has been done. There has been no waiver. That has been no delay. There's not been anything that has been done. You did not waive or delay sanctions. That is the conclusion, whether we are talking about Treasury or the State Department. Is that correct? Nothing has been done on sanctions.

Mnuchin: Again, there has been -- on our side, there has been an enormous amount of work done. I want to commend the intel community. And there will be sanctions that come out as part of that. I can't comment on the State Department's part of the package.

Waters: Would you describe the enormous amount of work that the Treasury Department has done that you just alluded to? What have you done?

Mnuchin: Again, I would encourage you to look at the classified report. It is -- it is incredibly extensive. It is a work product of the intel and the Treasury, and that work product is now being used for the basis of developing sanctions.

Waters: Are you telling me that, in your response to the overwhelming majority of this Congress having created law to impose sanctions on Russia that undermined our democracy -- that your response is classified? Is that what you’re telling me?

Mnuchin: Again, what I've said is part of the report was unclassified; part of the report was classified. I assure you that, as it relates to the work being done at Treasury, there will be sanctions. And, again, there is a lot of ongoing work that is being done to develop those sanctions, and we complied with the law on time.

Waters: The Congress of the United States does not know what you are doing. The Congress of the United States does not expect that your response to the public policy that was developed by us be somehow responded to in a classified way. Is there anything that you can tell us that you have done?

Mnuchin: Well, again, the law called for both a classified portion of the report, and an unclassified. Given that the majority of the work was developed on a classified basis, we classified the report. I'd encourage you and other members to look at it. It's an extensive amount of work, again, that -- the first phase was to develop the report and deliver it, which we did on time. And now we are developing sanctions on it. So I assure you we are very focused on this.

Waters: Well, I would encourage you to encourage the President to declassify any information that should be forthcoming to this Committee, just as he was able to do in the Nunes memo. He used his power of the President to declassify. I would suggest to you that, if information is declassified that should be available to this Congress, who voted overwhelmingly for sanctions on Russia, who undermined our democracy, those sanctions should be not delayed or waived, and we should have information about it. Let me continue. Is it the Treasury Department's position that no persons are engaged in significant transactions with Russia's defense and intelligence sectors?

Mnuchin: Again, I'm not going to comment on that, because that's not the portion that we're doing the work on.

Waters: Would you tell us again -- what are you doing the work on?

Mnuchin: Again, we did the work on what was referred to -- the oligarchs, as well as senior government officials. We detailed in the report where there was evidence of corruption, family relationships, net worth. We complied with a very extensive report that -- as I said, there is a classified version and an unclassified version. And we will be using the intelligence work where there is indications of corruption to follow this up with sanctions, which are -- are a very effective tool that we intend to use.

Waters: Are you referring to the work that you did on the oligarchs as the list of oligarchs that you lifted from the Forbes report?

Mnuchin: Again, we were very clear that the public, non-classified version is the universe that we looked at and was developed on open source -- both the oligarchs and the leaders. The classified report goes through that list in a very detailed manner, as well as other people that weren't on that list, that would have fallen below the billion-dollar threshold. So, again...

Waters: So...

Mnuchin: ... I'd encourage you to review the report. I think you will be impressed with the findings.

Waters: ... but let me just ask you, was there any persons identified that was engaged in significant transactions with Russia's defense and intelligence sectors? You don't have to give me their names, but I want to know. Did you identify -- did the Treasury Department identify any persons?

Mnuchin: Again, that portion of the act is not the work that I'm familiar with. The portion of the act that I'm familiar with is corruption. We did identify people that were involved in corruption, and we will be using that to come out with sanctions.

Waters: Let me just continue. Last week, it was reported that CIA Director Pompeo met with senior officials in Russia's intelligence service, one of whom is subject to U.S. sanctions and the other of whom is subject to European sanctions. This meeting occurred just prior to the deadline for implementing sanctions on those engaged in significant transactions with Russia's defense and intelligence sectors. These are the same sanctions that the President has refused to act on. As reported in the Washington Post, current and former U.S. intelligence officials said they could not recall so many heads of Russia's espionage and security apparatus coming to Washington at once, meeting with a top American official. Are you at all troubled by the curious timing of a meeting between Russian intelligence and U.S. intelligence, just days before the President failed to take action to implement sanctions pursuant to Section 231 of CAATSA?

Mnuchin: No, I'm not troubled. I believe that timing was just coincidental, and I believe there were various issues that the director wanted to discuss.

Waters: I'm sorry, I can't hear you.

Mnuchin: I said I am not troubled by that. I believe that the timing was coincidental and had nothing to do with the reports.

Hensarling: The time of the gentlelady has expired.


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