Billions in US public money 'spent in Iran'

Details emerge of billions awarded by the US to firms dealing with Tehran

The US taxpayer has given more than $107bn (£71bn)during the past decade to companies which are also doing business with Iran, it was revealed yesterday. That sum includes at least $15bn (£9.9bn) of US Government funds that were channelled to corporations which have defied international sanctions to help Iran develop its vast and strategically important oil and gas reserves.

News of the payments comes as Washington seeks to coax Russia and China into supporting tough new measures against Mahmoud Ahmadinejad's regime as punishment for its nuclear programme.

Draft UN proposals, which are supported by the UK, would impose a full arms embargo and heighten restrictions against Iranian banks and businesses. Passing the proposed sanctions at the UN's Security Council this month was already set to be an uphill struggle, even before yesterday's New York Times revealed the extent of Washington's investment in companies dealing with Iran.

The US Government's ban on dealing with Iran does not cover their foreign subsidiaries. Neither does it prevent Washington from giving taxpayers' money to overseas corporations which may also deal with Iran.

In fact, when it has suited, both George Bush's and Barack Obama's administrations have been happy to cut deals with firms that break both the spirit, and occasionally the letter of the sanctions laws against Iran.

A New York Times analysis of federal records and company reports reveals that 74 companies have done business with both the US Government and Iran since 2000. And despite heightened recent tensions, 49 of them continue to do business there with no announced plans to leave.

Two-thirds of the US taxpayer money handed out in that period went to firms dealing in Iran's energy sector, a major source of revenue for both the Ahmadinejad regime and its Islamic Revolutionary Guard Corps, which oversees the country's nuclear and missile programmes.

Many US Government contracts, totalling at least $102bn (£67bn), went to firms such as the South Korean energy giant Daelim Industrial, which in 2009 won a $111m (£73m) deal to build housing at a US military base near Seoul, shortly after also winning a $700m (£463m) contract to upgrade an Iranian oil refinery.

Royal Dutch Shell, one of seven firms that has challenged the Iran Sanctions Act, is another major beneficiary of those contracts. None of the 74 companies is accused of breaking any laws.

But their dealings highlight the difficulties in reconciling America's commitment to oiling the wheels of global capitalism with its myriad diplomatic goals.

In 2004, controversy erupted over news that Halliburton, the Vice President Dick Cheney's former company, had used a Cayman Islands subsidiary to sell oil-field services to Iran.