Rice holds stakes in firms that have done business in Iran


Susan E. Rice and her husband own modest stakes in global conglomerates that have until recently done business with Iran. (Spencer Platt/Getty Images)

U.S. Ambassador to the United Nations Susan E. Rice and her husband own modest stakes in companies that have until recently done business with Iran, prompting new questions from those opposed to her possible nomination as secretary of state.

The companies are global conglomerates. At least some of them have stopped doing business with Iran in order to comply with international sanctions.

“With respect to Iran, Ambassador Rice worked to impose the toughest U.N. sanctions regime ever on Iran for its continued failure to live up to its obligations,” said Rice’s spokeswoman, Erin Pelton. “Iran is more isolated than it has ever been and facing the toughest economic pressure ever mustered.”

Pelton added that Rice “has complied with annual financial disclosure requirements aimed at assessing conflicts of interest related to her service in the U.S. government.”

One of the biggest of the holdings, between $50,000 and $100,000, according to Rice’s disclosure statement for 2011, is Royal Dutch Shell. The international oil giant stopped buying crude oil from Iran early this year as sanctions were tightened to block oil exports by Iran and to stop financial transactions with its central bank.

A company spokesman said officials dealing with Iran could not be reached, but a person familiar with the company, speaking on the condition of anonymity because of a lack of authorization to discuss the topic, said Royal Dutch Shell owes Iran about $1 billion.

Rice and her husband also own between $15,000 and $50,000 of stock in ENI, the Italian international oil company. ENI has said that it is no longer doing business with Iran, but it has a waiver from sanctions to enable it to collect oil as payment for about $1 billion Iran owes the company from earlier business deals. The company had been purchasing crude oil and developing natural gas fields.

On Thursday, Republicans on Capitol Hill began circulating information about Rice’s investments connected to Iran. Asked about the disclosure revelations, one senior GOP official, speaking on the condition of anonymity because he wasn’t authorized to discuss the topic, said, “This news adds to the list of questions about Susan Rice — not only her public statements, but now there are broader concerns about her past record.” Democratic staffers also said on condition of anonymity for the same reason that the investments would prompt questions of her if she is nominated.

Several ethics advisers interviewed Thursday said they did not see an immediate problem with the Rice’s investments but suggested that people on such a career track not hold stock in individual companies.

“I really think holding companies like these should not disadvantage a nominee,” said Kenneth Gross, a Washington ethics lawyer who has advised Cabinet-level nominees from both political parties. “However, even the appearance of problems with holdings like these can be avoided by investing in highly diversified mutual or index funds rather than individual stocks.”

“I don’t see anything that violates the Ethics in Government Act,” said Brett Kappel, an ethics lawyer at Arent Fox, who reviewed the disclosure at the request of The Washington Post. “But I generally advise individuals who have to file these reports that they should consider either establishing a blind trust or transferring all assets into mutual funds.” It does not appear from the disclosure that Rice’s investments are held by a trust.

In 2010, Rice led talks on a U.N. sanctions resolution on Iran. The Security Council approved a draft developed by Rice, which was described by diplomats as one of the toughest sanctions efforts in the the history of the organization.

However, lacking Chinese and Russian support for further U.N. restrictions, the United States and Europe have adopted their own tougher measures. Iranian oil exports have plunged in recent months, and the United States is pressing countries such as China, South Korea and India for deeper cuts in oil purchases.

Rice is one of the richest members of the Obama Cabinet. She and her husband, Ian Cameron, were worth between $23.5 million and $43.5 million in 2009, according to the Center for Responsive Politics. Cameron, a former television producer, is, like Rice, a Stanford University graduate. His father owned Victoria Plywood, a lumber company in British Columbia.

Rice, a Rhodes scholar, worked for the management consulting firm McKinsey & Co. before joining the Clinton administration, where she served on the National Security Council and later as assistant secretary of state for african affairs. Her late father was an economics professor, World Bank director and a governor of the Federal Reserve. Her mother is an education expert and guest scholar at the Brookings Institution.

The flap over Rice’s investments began Wednesday over much larger stakes she and Cameron have in TransCanada, owner of the Keystone XL pipeline, and companies active in the development of Canadian oil sands. Early next year, the State Department is expected to rule on whether to allow the construction of the controversial pipeline, which is opposed by environmental groups.

Several of the companies in which Rice has invested have been cited by an organization called United Against Nuclear Iran, chaired by Mark Wallace, a deputy ambassador to the United Nations under President George W. Bush. The organization, which claims bipartisan support in pushing to isolate the Iranian regime, publishes a list of companies doing business in Iran.

The information about Rice’s investments in firms linked to Iran was first reported on the Web site of the Washington Free Beacon, a publication of the Center for American Freedom. The Web site says it is “dedicated to uncovering the stories that the professional left hopes will never see the light of day.”

Colum Lynch at the United Nations contributed to this report.

Steven Mufson covers energy and other financial news.
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