Senate OKs sanctions on Iran’s central bank

Saying they were fed up with Chinese and Russian stalling on sanctions, senators on Thursday voted to punish both Iran’s central bank and foreign institutions that do business with it — moving further than the Obama administration has been willing to go.

Minutes earlier, senators also struck a last-minute deal that guarantees habeas-corpus rights to American citizens held as terrorism suspects, though it preserved new language giving the military first crack at detaining them if they are suspected of being part of al Qaeda.

Together, the two moves cleared the way for the annual massive defense-policy bill to pass with a huge majority later Thursday and head to a conference committee with the House before a probable showdown with President Obama, who has issued a veto threat on the legislation over the habeas-corpus provision.

That agreement would still allow the military to detain citizens captured in the U.S., but would give them a chance to appeal to a U.S. court. It’s the latest point in a debate that began 10 years ago, after the Sept. 11 terrorist attacks, about the balance between security and preserving citizens’ rights.

“Homegrown terrorism is going to become a greater reality, and we need to have tools,” said Sen. Lindsey Graham, South Carolina Republican, who helped write the compromise. “In some cases, holding people who have decided to help al Qaeda and turn on the rest of us and try to kill us — so we can hold them long enough to interrogate them to find out what they’re up to — makes sense.”

The Obama administration says that amounts to micromanaging the war on terrorism. It instead wants the executive branch to have the ability to decide on a case-by-case basis whether a person caught in the U.S. should be turned over to the FBI and read his Miranda rights, or be turned over to the military for interrogation as enemy combatants.

Mr. Obama’s advisers have said he will veto the bill, and reiterated that threat as recently as Tuesday.

On Iran, the Senate also is moving into territory that the administration has been avoiding. But senators said they were seeking to push the U.S. into the lead in trying to punish Iran for what international inspectors say is a bid to produce nuclear weapons.

The amendment would sanction financial institutions that do business with Iran’s central bank, forcing them to choose between the U.S. market and Iran.

The Obama administration last month announced sanctions on Iran’s energy and financial sectors, but did not go after its central bank, saying it feared such a move could lead to an oil crisis.

To counter that, senators included an option for the president to waive the sanctions if he deems national security or the energy supply would be at risk.

“This is the maximum opportunity to have a peaceful diplomacy tool to stop Iran’s march to nuclear weapons,” said Sen. Robert Menendez, New Jersey Democrat, who pushed for the amendment.

It passed by a vote of 100-0.

The defense bill is considered one of the few must-pass pieces of legislation Congress considers each year.

The House passed its version earlier, but the Senate bill had been held up over the issue of military detention of terrorist suspects captured in the U.S.

Sens. Carl Levin, the Democratic chairman of the Armed Services Committee, and John McCain, the panel’s ranking Republican, struck a deal last month that gave the military first crack, but also gave the administration a waiver if it deemed national security to be at stake.

That deal was upheld in a 60-38 vote earlier this week.

Thursday’s final compromise on habeas-corpus rights was written by a half-dozen senators and their staffers in the back of the Senate chamber, even as the clock ticked down to an evening deadline for voting on the bill.

The frenzy of activity culminated in staffers holding papers up against the marble columns as they wrote the details in longhand.

It passed by a 99-1 vote, with only Sen. Jon Kyl, Arizona Republican, voting against it.

The change added a section saying that nothing in the bill alters current law on the rights of citizens or legal immigrants.

Backers said if they are detained by the military, that guarantees them the chance to ask a court whether they have properly been labeled enemy combatants.

The move likely punts the eventual question of whether citizens can be subject to indefinite detention to the Supreme Court, said Senate Minority Whip Richard J. Durbin, Illinois Democrat, who said the court has yet to approve indefinite detention of citizens who are deemed to be part of the war on terrorism.

Mr. Graham said he reads the law and court precedents to already allow indefinite detention when someone is deemed an enemy combatant at war with the U.S. But he said the key to Thursday’s deal is that it preserves whatever the current law is, and doesn’t give either side a leg up.

“Let’s just stay with what we believe the law is,” he said.