Sep. 12, 2018
WASHINGTON — A new White House executive order announcing possible sanctions on Russia will not be enough to deter Russian President Vladimir Putin from future election meddling, said three foreign policy experts at a Congressional hearing Wednesday.
The executive order, issued Wednesday morning, comes in the wake of bipartisan outrage at equivocal comments about Russian meddling in the 2016 election made by President Donald Trump after a summit with Putin in Helsinki this July.
“[The executive order] strikes me as more of a press release than a change of policy,” Daleep Singh, a senior fellow at The Atlantic Council and a former Treasury Department official, told the Senate Banking Committee.
Singh’s assessment lines up with a bipartisan push to vote on robust sanctions legislation.
The executive order outlines a review process by which executive branch officials could impose sanctions on foreigners who meddle in U.S. elections.
The hearing was the third time in three weeks the Banking Committee heard testimony on Russia’s attempts to destabilize the United States and its allies. The first two called on officials from the Treasury and State Departments, Homeland Security, and outside experts to testify on the efficacy of existing sanctions.
Committee Chairman Mike Crapo (R-Idaho) asked the witnesses to weigh in on what Congress should do next, noting the delicate balancing act required when imposing sanctions on a world power like Russia. “A serious amplification of sanctions is fraught with the potential for unacceptable blowback against U.S. and European interests, and our interests in the Middle East and Asia,” he said, “unless carefully constructed and tied to specific behaviors.”
While current sanctions focus on penalizing Russian oligarchs in Putin’s inner circle, Dr. Leon Aron, director of Russian Studies at the American Enterprise Institute, a conservative think tank, said sanctioning oligarchs is “the diplomatic equivalent of fast food. It feels very good at the time,” but ultimately has little effect on Putin’s decision-making. Instead, he said, Congress should focus on disrupting Russia’s oil industry by banning Americans from investing in, or sharing technology with, Russian oil companies, a measure included in one of the Senate’s pending sanctions bills.
At least half of Russia’s state budget comes from oil revenues, Aron said, and “the ban on financing and technology transfer is a ticking time bomb” because it would prevent Russia from developing the capacity to drill in the Arctic Circle, where most of its oil is trapped beneath permafrost.
Daleep Singh, a senior fellow at the Atlantic Council, who helped design sanctions on Russia in 2014 in the Obama administration, proposed measures to identify how Putin and other high-level officials manage their personal wealth overseas, and to place sanctions on those organizations. He also recommended prohibiting U.S. investors from purchasing Russian sovereign debt. He said he was hesitant to do this in 2014 because of the potential for triggering a full-scale financial crisis in Russia that would cause undue harm to Russian citizens and the global economy.
Such a crisis would give credence to Putin’s narrative of malicious Western aggression against Russia, and damage the United States’ reputation as a steward of the global economy, which Singh said “is hard to win and easy to lose.”
Crapo said after the hearing that he found the sanctions against Russia’s oil companies and the ban on purchasing Russian sovereign debt to be the two most important measures recommended by the hearing’s experts. The president’s latest executive order was “an important first step,” he said. “It’s important we use all of the tools, including economic sanctions…and make sure they are able to be utilized in a flexible and effective way.”