Iran General News2 Congressmen probe Iranian links to U.S.-supported World Bank...

2 Congressmen probe Iranian links to U.S.-supported World Bank fund

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FOX News: Two congressmen have asked the Justice Department to review of U.S. Treasury-supported fund being used to underwrite an Iranian plastic-making operation. FOX News

WASHINGTON — Two congressmen have asked the Justice Department to review of U.S. Treasury-supported fund being used to underwrite an Iranian plastic-making operation.

The money transfer appears to contradict a 13-year-old Clinton administration executive order barring financial support of Iranian petroleum resource development, Reps. Mark Kirk, R-Ill., and Steven Rothman, D-N.J., wrote in a letter sent Friday to Attorney General Michael Mukasey.

The letter focuses on an Iranian government project that is being aided by the World Bank’s Multilateral Investment Guarantee Agency — MIGA — an organization that sets aside money in order to insure major development projects. The insurance allows those projects to leverage other financial support.

The World Bank agency approved a $122 million guarantee for the Mehr Petrochemical Company to “produce polyoelfins, including high-density polyethylene.”

Mehr Petrochemical is a subsidiary of Iran’s National Petrochemical Company, the congressmen say, and the World Bank agency is being supported by U.S. taxpayer money: $1.3 million that the Treasury Department transferred during the 2006 fiscal year.

There is no allegation that money actually has been disbursed to Iran through the World Bank fund, only that the money provided by the United States is providing the Iranian company a better financial position.

Still, the congressmen said Executive Order 12957 “explicitly prohibits financing guarantees for the development of Iranian petroleum resources,” yet the World Bank-supported project appears to do just that.

They write: “High density polyethylene is a polyethylene thermoplastic made from petroleum, thereby meeting the definition of a ‘petroleum resource.’ “

The order prohibits the “entry into or performance by a United States person, or the approval by a United States person of the entry into or performance by an entity owned or controlled by a United States person, of (i) a contract for the financing of the development of petroleum resources located in Iran, or (ii) a guaranty of another person’s performance under such a contract.”

A later executive order from 1997 appears to cover even broader ground, prohibiting “any transaction or dealing by a United States person, wherever located, including purchasing, selling, transporting, swapping, brokering, approving, financing, facilitating, or guaranteeing, in or related to … goods or services of Iranian origin or owned or controlled by the Government of Iran … .”

“We would appreciate your legal guidance on whether this transfer constituted a violation of Executive Order 12957 and whether any payout of this guarantee could ever legally be executed,” Kirk and Rothman asked.

In an e-mail response to FOXNews.com, Justice Department spokesman Erik Ablin wrote: “We will review the letter and respond to Reps. Kirk and Rothman.”

FOX News’ James Rosen and Greg Simmons contributed to this report.

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