It's dated March 8 and it begins thusly:
Thank you for contacting me about the removal of the Russian aluminum company Rusal from the Treasury Department’s Specially Designated Nationals (SDN) sanctions list. I appreciate hearing from you.Huh. When did I ask about Rusal? Never, actually. However there's a clue a few paragraphs down:
As you may be aware, on April 6, 2018, the Treasury Department imposed sanctions on Russian oligarch and Putin ally Oleg Deripaska.Ah, there it is! I have asked about Deripaska - in my 95th letter, dated January 29, 2019.
Here's what I asked:
According to CNN, earlier this month the Senate failed to move on a resolution that would have stopped the lifting of sanctions of three Russian companies tied to Oleg Deripaska, a man with close ties to the Kremlin who the Treasury Department has been investigated for money-laundering, and accused of extortion and racketeering.And you'll note that, after looking at Senator Toomey's opening, that I never asked him about Rusal or its removal from the Treasury Department's sanctions list.
The NYTimes reported that lifting those sanctions could wipe out hundreds of millions of dollars of Deripaska's debt.
Given all that we now know regarding the Russia investigation into the Trump Campaign/Administration, and Paul Manafort (who, as I am sure you're aware, got a $10 million loan from Deripaska) why on Earth would you side with Donald Trump on this and vote in favor of lifting those sanctions?
I asked about Trump's lifting of sanctions on Oleg Deripaska - something not mentioned in Toomey's letter until his third paragraph:
As you may be aware, on April 6, 2018, the Treasury Department imposed sanctions on Russian oligarch and Putin ally Oleg Deripaska. Because of Mr. Deripaska’s controlling ownership stake in the international aluminum company Rusal, sanctions were extended to the company as well. These sanctions were placed on Rusal not for any illicit conduct by the company, but solely because of its association with Mr. Deripaska.In fact the rest of the letter is about Rusal, not Derpiaska - and nothing about the specific charge of wiping out "hundreds of millions of dollars of Deripaska's debt."
Specifically Toomey, during his self-congratulatory letter, specifically avoided that part of the story.
From the NYTimes we learn of the agreement, that was described in a letter to Congress (but not released publically):
It shows that the sanctions relief deal will allow Mr. Deripaska to wipe out potentially hundreds of millions of dollars in debt by transferring some of his shares to VTB, a Russian government-owned bank under limited United States sanctions that had lent him large sums of money.The restructuring did this:
And VTB, which reportedly already owned nearly 10 percent of EN+, will receive nearly 92 million additional shares, bringing its total stake in the company to about 24 percent.That's what I asked Senator Toomey about and that's exactly what he avoided answering.
In return for the additional shares going to VTB, which were worth nearly $800 million at the close of trading Friday on the Moscow stock exchange, Mr. Deripaska would be released from debts he owes the bank, the document shows. Mr. Deripaska had secured the loans with stock in one of his companies before the sanctions were announced. The stock prices of Rusal and EN+ plummeted after the sanctions were announced last year, but rose on the news of the deal to lift them — in effect allowing Mr. Deripaska to pay off more of the loans than he would have been able to do absent a deal with the administration.
Try and a miss, Senator.
Full text of his letter:
Thank you for contacting me about the removal of the Russian aluminum company Rusal from the Treasury Department’s Specially Designated Nationals (SDN) sanctions list. I appreciate hearing from you.
I have consistently said Vladimir Putin is a dangerous autocrat who should be treated as an international pariah. He and Russia remain dangerous threats, and Congress must be vigilant against our adversaries’ attempts to expand their influence and undermine trust in our government. Towards that end, I was pleased to support legislation (Public Law 115-44) that codified and strengthened existing sanctions on Russia. In addition, on July 24, 2018, I sent a letter with Sen. Chris Van Hollen (D-MD) to the Treasury Department urging immediate imposition of sanctions on the 12 Russian military intelligence officers who were indicted for their involvement in cyber operations meant to interfere in the 2016 U.S. presidential election. I will also continue to support actions that increase and expand sanctions when appropriate, strengthen our alliance with NATO countries, improve our missile defense system, modernize our military, and minimize the use of Russian energy on U.S. bases in Europe.
As you may be aware, on April 6, 2018, the Treasury Department imposed sanctions on Russian oligarch and Putin ally Oleg Deripaska. Because of Mr. Deripaska’s controlling ownership stake in the international aluminum company Rusal, sanctions were extended to the company as well. These sanctions were placed on Rusal not for any illicit conduct by the company, but solely because of its association with Mr. Deripaska.
After months of negotiation, the Treasury Department reached a binding agreement with Rusal that severed Mr. Deripaska’s control of the company and achieved compliance with U.S. sanctions law and objectives. The terms of this deal dramatically diminish Mr. Deripaska’s ownership stake, place any dividends in a frozen account that he cannot access, remove his voting control and managerial influence, and impose unprecedented monitoring requirements on the company. Furthermore, Rusal’s new board of directors will be composed of independent directors with no ties to Deripaska or any other sanctioned individual. A majority of directors will now come from outside the company. Similarly, Rusal’s holding company will be led by a board of 12 directors vetted by the federal Office of Foreign Assets Control, eight (two-thirds of the board) of whom will be U.S. or U.K. citizens. The holding company will use its majority control of Rusal to provide additional monitoring for potential involvement of Mr. Deripaska in the company’s affairs. Treasury retains the ability to sanction Rusal or related entities directly should any activities warrant designation in the future.
Continuing to sanction an entity that agrees to change ownership and management in order to comply with U.S. law would undermine the integrity and effectiveness of our sanctions regime. It would signal to foreign actors that the US will no longer adhere to its own rules and that there is no reason for them to do so either.
In this specific case, keeping sanctions in place also would have risked prolonged damage to the US economy. Rusal is the world’s second largest producer of aluminum, and supplies US businesses with about 14% of their aluminum consumption. Sanctioning Rusal caused the price of aluminum to jump by more than 30%, threatening thousands of jobs in Pennsylvania where aluminum manufacturing has a heavy presence.
Furthermore, failure to resolve the situation would have likely only worsened national security. Rusal could have been nationalized by the Russian government, thus negating the original justification for sanctioning Rusal by formally transferring ownership. Without any of the valuable reforms included in the Treasury agreement, we would have lost insight into the company’s future activities and beneficiaries. Alternatively, Rusal could have been sold to a foreign rival like China, which would then dominate the global aluminum industry.
On January 16, 2019, the Senate rejected a resolution introduced by Senator Charles Schumer (D-NY) to overturn the Treasury agreement. I voted to uphold the Treasury action because, as outlined above, it is consistent with US law and continues to impose the full force of US sanctions on Mr. Deripaska and other Russian oligarchs like him who support Putin’s malign actions around the globe.
Thank you again for your correspondence. Please do not hesitate to contact me in the future if I can be of assistance.