House GOP Leader Says Energy Tweak Near in Sanctions Bill

(Bloomberg) -- House Majority Leader Kevin McCarthy said there’s a consensus among lawmakers to change legislation on Russian sanctions so that U.S. companies won’t be blocked from lucrative foreign oil deals.

The bill, which has been stalled amid procedural issues and concern about the impact on the energy industry, adds penalties against Russia and Iran and likely will be altered to include North Korea, McCarthy said in an interview on Tuesday in Washington. The White House has raised concern about the bill because it would prevent President Donald Trump from taking unilateral steps on Russia sanctions.

A growing number of businesses -- including General Electric Co. and Honeywell International Inc. -- are expressing concern about the impact of the Russia sanctions language in the Senate legislation, McCarthy said. Oil companies, including  Royal Dutch Shell Plc, also have raised concern.

A section of the legislation would prevent U.S. companies from doing business anywhere in the world with Russian interests, causing consternation in the capital-intensive energy industry and among other companies that rely on foreign partnerships.

McCarthy of California said there’s “broad consensus” among lawmakers from both parties to change that provision. Although some other procedural issues remain, the House could move forward on an altered sanctions bill next week. McCarthy said the revised measure adding North Korea sanctions and the energy changes could start in either the House or the Senate.

House Democrats say they’re open to the modifications, but some are continuing to resist a previous change that would allow only the speaker to object if the Trump administration seeks to weaken sanctions on Russia. In the Senate, the bill allows any lawmaker to start the process to block a unilateral decision by Trump.

House Minority Leader Nancy Pelosi of California and Minority Whip Steny Hoyer of Maryland are split over how to proceed. Pelosi said last week she is willing to move forward with the Senate’s legislation while Hoyer is seeking a compromise that would allow the majority or minority leader to be able to raise objections to the president lifting sanctions on Russia.

Some Democrats are concerned that continuing to hold out for broader authority for the minority risks miring the whole effort in further demands for changes, according to a Democratic aide. That worry being borne out by the increasing number of issues McCarthy has raised with the bill, the aide said.

Ben Cardin of Maryland, the top Democrat on the Senate committee on foreign relations, said the bill can be revised in a way that maintains its original intent. He said he hopes the House can vote on its version of the bill before members leave for August recess. The Senate is scheduled to remain in session for the first two weeks of August.

“I don’t think there’s any objection we have with North Korea, but we can do that as a separate bill,” Cardin told reporters Tuesday. Bipartisan North Korea sanctions passed 419-1 in the House on May 4.

To contact the reporters on this story: Anna Edgerton in Washington at aedgerton@bloomberg.net; Terrence Dopp in Washington at tdopp@bloomberg.net. To contact the editors responsible for this story: Kevin Whitelaw at kwhitelaw@bloomberg.net Justin Blum, Joe Sobczyk.

Copyright 2017 Bloomberg News.

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