Treasury list of Russian oligarchs will do nothing to deter meddling in midterm elections

The Trump administration is definitely not interested in sanctioning Russia on this.

US President Donald Trump sits alongside US Secretary of State Rex Tillerson (2nd L) and Senior Adviser Jared Kushner (L) during a working lunch with Spanish Prime Minister Mariano Rajoy in the Cabinet Room of the White House in Washington, DC. CREDIT: Saul Loeg/AFP/Getty Images.
US President Donald Trump sits alongside US Secretary of State Rex Tillerson (2nd L) and Senior Adviser Jared Kushner (L) during a working lunch with Spanish Prime Minister Mariano Rajoy in the Cabinet Room of the White House in Washington, DC. CREDIT: Saul Loeg/AFP/Getty Images.

When President Donald Trump took took to the podium to deliver his first State of the Union speech on Tuesday night, he made no reference to the largest shadow hanging over his presidency so far: The FBI’s investigation into possible collusion between Russia and Trump’s inner circle in the 2016 elections.

In fact, in a speech that highlighted America’s strength, he only mentioned Russia once, in concert with China, as “rivals” who pose a “challenge to our interests.”

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Just 24 hours before his address, his administration released a Congressionally-mandated report that was supposed to detail potential targets of new sanctions against Russia for its interference in the 2016 elections. But the report, with the names of 114 powerful and wealthy Russians, is copy-and-paste job from a Forbes magazine oligarch list, with Treasury Secretary Steven Mnuchin saying that there would be no sanctions at this time.

Sen. Cory Booker (D-NJ), who is on the Committee on Foreign Relations, told NPR on Wednesday morning that the Trump administration’s response to Russia’s “stunning” cyberattacks on the United States is “tantamount to maleficence.”

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“[Russian President Vladimir] Putin respects strength and we’re lying down in the face of ongoing attacks … it contradicts what he said in his speech about a strong country,” said Booker.

Putin called the list “a hostile step” but then joked that he felt “slighted” that he wasn’t included on it. He also said it was “stupid” for the United States to treat Russia like Iran and North Korea as the Trump administration calls on Russian cooperation in imposing sanctions on those countries over their weapons and nuclear programs.

The report, however, has little bark and no bite.

“This sends a signal that Trump administration is not about to escalate the sanctions program in response to the alleged meddling by Russians in the elections,” said William Pomeranz, Russia expert and deputy director of the Wilson Center’s Kennan Institute.

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“I can identify several people on the list who should not be subject to sanctions. There are also people on this list who are no longer in the positions that they’re identified [as being in] in this unclassified report,” Pomeranz told ThinkProgress, noting that there is a classified version of the document.

“They don’t go anything below a minister – they don’t go into family members, which the legislation potentially called for … the people on this list are not the people who are engaged potentially, in interference in the U.S. elections,” he said.

The Russians, said Pomeranz, view this as being on the same level as the sanctions levied against them after Russia seized Crimea in 2014, “when we put in sanctions and we listed a few people and thought somehow that was going to have an impact or deter something,” he said. But the sanctions that came after Russia shot down a Malaysia Airlines flight in 2014, killing 298 people, were far more serious, while the unclassified report released on Monday, said Pomeranz, did not have much substance.

The contents of the unclassified report, he said, “lends one to think that the Trump administration is following the letter, but not the spirit of the law. They were asked for a report, they provided a report.” He added that the Russians have no reason to fear what’s on this list because it’s not even “a real work product.”

“The odd thing about this unclassified report is this statement upfront that ‘inclusion in this report does not constitute determination by any agency that the individuals or entities meet the criteria for designation under any sanctions program,'” he said, adding that the report’s preamble also makes it clear that there are no limits imposed on dealing with those listed in the report.

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“Why did they take what seems to appear such a casual approach toward the compilation of this list? And why, by creating such long list, do they suggest that no one on this list is going to be subject to anything? It doesn’t have any deterrent value,” said Pomeranz.

In other words, being named on this list — as opposed to other sanctions lists created by the Treasury Department’s Office of Foreign Assets Control (OFAC) — basically means nothing.

That the report was not released by OFAC, but by the Treasury Department, said Brian O’Toole, non-resident senior fellow at the Atlantic Council and former senior adviser to the director of OFAC, is an important distinction.

“Treasury, writ large, doesn’t impose financial restrictions or any restrictions on dealing — OFAC is the one that does that. It was good that they released it from the broader Treasury perspective rather than OFAC so they can not confuse people … and I don’t think that people are confused by it. I think that people are horrified by it, as I am,” O’Toole told ThinkProgress.

“There was so much tension in Moscow over this, so much expectation. And this really failed … because they [Russians] were so scared of this, and it came out and it was this cut-and-paste thing and no one is taking it seriously,” he said, adding that Russia’s financial markets, which had been down in anticipation of this report, rebounded on Tuesday.

Even if the classified report is great, it won’t matter, he said, because the opportunity to “needle the Russians” has been lost. And that will have consequences.

“The missile attack on Syria last year, after the chemical weapons attack, was indirectly targeting Russia — there were Russian people on the base — and that was a pretty aggressive action,” he said, but there other fronts on which Russia can “cause us a lot of headaches,” said O’Toole.

It’s not just the election — Russia can have massive impact on the effectiveness of sanctions against North Korea; it can kick things up in Syria; it is considering arming Libyan opposition; and with “fighting season” coming back to Ukraine in the spring.

And if anyone on the list was actually involved in election meddling, there’s nothing to deter them from doing so in the upcoming midterm elections, as CIA Director Mike Pompeo told the BBC he was certain would be the case.

In fact, O’Toole said that Monday’s Treasury report will have “a reverse impact.”

“I think what [the report] shows is that people who worry about the election being hacked in 2018 ought to be worried because this administration seems to have a bit of a blind spot,” he said.

At the heart of the decision to deliver a random list of names is a battle between a Congress that wants to make sure the president does not repeal or waive any of the sanctions already placed on Russia, and a president who sees this as an encroachment on his power.

Here’s what White House Press Secretary Sarah Huckabee Sanders had to say to the press after Trump in August reluctantly signed the The Countering America’s Adversaries Through Sanctions Act, which calls for a report that could identify the potential impact of imposing new or secondary sanctions on individuals or entities and requires the president to seek congressional approval before he lifts or waives sanctions that are already in place.

Look, this morning the president signed The Countering American Adversaries Through Sanctions Act. The president favors tough measures to punish and deter the bad behavior of the rogue regimes in Iran and North Korea. And he also sent a clear signal that we won’t tolerate interference in our democratic process by Russia. The bill was improved, but Congress has encroached on the power of the presidency.

“The picture that you [get] when you look at the grand total of is that the administration isn’t willing to confront this and that’s going to encourage the Russians to behave badly,” said O’Toole. “And that encourages Congress to take the hardest line possible, which isn’t necessarily smart either.”