The State Department angered Congress by announcing that it did not plan to impose new sanctions called for by law. And the Treasury Department angered Moscow with a new name-and-shame list identifying 210 senior Russian political and business figures.
MOSCOW — The Trump administration managed the unusual feat this week of outraging both Russia’s leaders in Moscow and Russia’s biggest critics in Washington with its handling of a new law intended to punish the Kremlin for interference in the 2016 U.S. elections.
The State Department angered members of Congress by announcing on Monday that it did not plan to impose new sanctions called for in a measure that President Donald Trump reluctantly signed into law last year. And the Treasury Department angered Moscow late Monday night — Tuesday morning in Russia — with a new name-and-shame list identifying 210 senior Russian political and business figures.
The twin announcements left a muddled impression of how Trump plans to approach the Kremlin in his second year in office even as investigators search for evidence of collaboration between his campaign and Russian agents. His domestic opponents complained that once again Trump seemed to be in thrall to Russia, while the Kremlin complained that he was a captive of what it described as the American deep state.
“This is definitely an unfriendly act,” President Vladimir Putin said when asked about the Treasury Department list during a campaign event in advance of Russia’s own presidential election in March. “It is complicating Russian-American relations, where the situation is already hard, and is definitely harming international relations in general.”
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Putin said Moscow had pondered virtually breaking ties with Washington over what is known in Russia as the “Kremlin report,” but decided against it. “We were prepared to undertake retaliatory steps, and quite serious ones too, which would cut our relations to zero,” he said. “But we will refrain from such steps for the time being.”
On Capitol Hill, lawmakers criticized Trump for not imposing additional sanctions on Russia as envisioned in the legislation passed over his objections by veto-proof bipartisan majorities in both houses in August.
“It is a grave breach of President Trump’s responsibilities to reward President Putin by inaction for his intervention in an American election — it represents nothing less than appeasement for an attack on our country’s democracy,” said Rep. Adam Smith of Washington state, the ranking Democrat on the House Armed Services Committee. “It is time for us time to stand up for our country. We cannot let these actions to continue to go unpunished.”
The new law made Monday an important date for action. The law required Trump to begin imposing sanctions on large purchasers of Russian military equipment. But the State Department said it did not need to do so at this point because it had been using the threat of the law in recent months to press customers to cancel potential deals that would have been worth billions of dollars to Russia.
The law also directed Trump to produce a list of “senior political figures and oligarchs” in Russia. No actions were required against those on the list, but it was meant to signal those close to Putin that they had much to lose if Moscow does not pull back from its intervention in Ukraine and its interference in Western elections, and the prospect of being included alarmed many in Russia.
Grilled by Democrats during a congressional hearing, Treasury Secretary Steven Mnuchin rejected suggestions that the administration was delaying action on Russia and said that additional action would be taken. “There will be sanctions out of this report,” he said.
But when Sen. John Kennedy, R-La., pressed him on whether he agreed that Putin “has acted like a thug,” Mnuchin demurred.
“Um, I’m not going to use that terminology,” Mnuchin said, “but there are clearly issues that we need to address and that we have done with sanctions.”
“Let’s go through the list,” Kennedy replied. “Ukraine, Crimea, Syria, he meddled in our election, he’s helping North Korea cheat. I mean it seems to me in terms of sanctions, we only hit him so hard he’s coughing up bones. I mean he’s not getting better. He’s getting worse.”
The announcements came just days after two senior Russian intelligence officials traveled to Washington to meet with Mike Pompeo, the CIA director. Sergey Y. Naryshkin, director of the foreign intelligence service, was in Washington last week for consultations on terrorism, according to Russian state media, even though he was sanctioned by the U.S. government under President Barack Obama.
According to a U.S. official, he was accompanied by Alexander V. Bortnikov, director of the domestic intelligence service, who has not been sanctioned. The CIA would not confirm the meeting but said any interactions would have been in accordance with American law.
In an interview with the BBC that was broadcast on Monday, Pompeo said he anticipated that Russia would try to interfere in this year’s midterm congressional elections. “Of course,” he said. “I have every expectation that they will continue to try and do that, but I’m confident that America will be able to have a free and fair election, that we will push back in a way that is sufficiently robust that the impact they have on our election won’t be great.”
The Treasury list, released just before midnight in Washington, included almost the entire roster of senior Russian government officials as well as 96 billionaires. The document said that inclusion on the list did not mean involvement in “malign activities.”
Dmitry S. Peskov, Putin’s spokesman, called it an “enemies list” that could unfairly tar those on it. “The fact that this list was made public can potentially do damage to the image and reputation of our enterprises, businessmen, politicians and officials,” he told reporters, calling the roster “unprecedented.”
“De facto everyone is called the enemy of the United States,” Peskov said. “If you read the text and the title of this document, all this is done in accordance with the law on countering the enemies of the United States.”
Government figures on the list include more than 40 of Putin’s closest advisers; all 30 members of the Cabinet of ministers, including Prime Minister Dmitry A. Medvedev; and the heads of many important state agencies and state-run companies. At least 22 listed people had already been sanctioned by the Obama administration.
The list was met with a combination of disbelief and derision in Russia, as mocking comments ricocheted around social media. Some joked that it had taken the Trump administration six months to photocopy the Forbes list of Russian billionaires, since they were all included, as well as the link detailing senior officials on the Kremlin website. Treasury officials confirmed that they did rely on Forbes, among other publicly available sources.
“The list looks like the book ‘Who’s Who in Russian Politics,’ ” Arkady V. Dvorkovich, a deputy prime minister included on the list, was quoted as saying by the Interfax news agency. Like many, he shrugged it off as merely a list of names. “There is no need for action now.”
The 96 oligarchs are each worth more than $1 billion, including well-known people like Mikhail Prokhorov, the owner of the Brooklyn Nets basketball team, and Eugene Kaspersky, whose anti-virus technology firm has been under fire in the West over allegations that it cooperates with Russian intelligence.
One man on the list, Kirill Shamalov, who married one of Putin’s daughters, might no longer be in the billionaire’s club since they have recently split, Bloomberg reported.
Kaspersky Labs issued a statement objecting to its founder’s inclusion, saying the company did not have political influence, and Kaspersky commented on his own Twitter account, emphasizing that the company helps protect customers “regardless of their origin.”
The businessman Gavril Yushvaev, who said he had invested $500 million in Western startups, told the online news website The Bell that his overseas partners had been calling to say that they would ignore the list. “Everybody needs people who can invest, regardless of these lists,” he said. “I am not upset. Whatever happens, happens.”
The announcement said there were more names on a classified annex provided by the Treasury Department, including lesser officials or businessmen worth less than $1 billion.
Sen. Chuck Schumer, D-N.Y., the minority leader, said Tuesday that Trump was effectively circumventing the law and “afraid to sanction Putin” and his associates.
“If President Trump wishes to save his presidency from the shame of having failed to address one of the gravest threats facing our country, he would announce this evening in no uncertain terms that he was sanctioning President Putin,” Schumer said, referring to the president’s State of the Union speech on Tuesday evening. “Any other president would have already made it their priority to take decisive action in their first year.”