A group of House and Senate Republicans have objected to a provision in the National Defense Authorization Act conference report that would allow the United States to transfer the proceeds of forfeited Russian property to Ukraine, according to people involved with the negotiations.
The NDAA conference report will ultimately become the sweeping defense policy legislation negotiated by the House and the Senate and brought to the floor of both chambers for final passage during the post-election session.
Democrats say stripping the provision from the nearly $840 billion package undercuts the Biden administration’s ability to transfer assistance to Ukraine’s beleaguered economy as it pours resources into the eight-month conflict. Republicans say the provision has not been fully vetted by the relevant committees.
The dispute over the measure comes amid questions about the future of Republican support for Ukraine’s war effort. Establishment Republicans, led by Senate Minority Leader Mitch McConnell of Kentucky, have pledged to continue approving billions of dollars of U.S. security and budgetary assistance to Ukraine, while House Minority Leader Kevin McCarthy (R-Calif.) has called for an end to writing a “blank check” for the war.
Democrats have worked to tamp down their own internal divisions on Ukraine in recent days after House liberals retracted a letter calling on the Biden administration to consider direct talks with Russia.
“It is unconscionable Senate Republicans are obstructing an important provision that would allow DOJ to transfer forfeited Russian assets to assist Ukraine and its effort against Russia’s brutal war,” said a Democratic staffer involved in the process who like others spoke on the condition of anonymity to discuss sensitive negotiations. “This provision passed as part of the House NDAA and should not be attacked by the right or stripped from the final bill.”
Senate Republicans have primarily objected to the provision on the basis of procedure and believe the provision should be reviewed by the House and Senate judiciary committees, according to Republican staffers. A Republican Senate aide familiar with the matter said the provision has not been “fully litigated” and questioned the overall effectiveness of asset forfeiture.
“We’re all for supporting Ukraine, which is why we think the more meaningful measure to stop funding Putin’s war machine would be to cut off the oil funding it,” the aide said. “We need to look at making sure oil price caps work to punish Russia. Seizing Oleg Deripaska’s yacht isn’t going to change Putin’s behavior.”
Deripaska, a Russian aluminum magnate who owns a $65 million superyacht, has been under U.S. sanctions since 2018.
Laura Peavey, a spokesperson for Republicans on the House Financial Services Committee, said that there is broad opposition to the provision, though it already passed in the House with bipartisan support.
“If we are serious about cutting off Putin’s cash flow, we should instead take up Congressman Barr’s No Energy Revenues for Russian Hostilities Act to prevent hard currency from supporting the Putin regime by prohibiting U.S. financial institutions from engaging in transactions related to Russian energy,” Peavey said of the bill proposed by Rep. Garland “Andy” Barr (R-Ky.).
Attorney General Merrick Garland announced the creation of a task force in March to enforce U.S. sanctions against Russia’s Kremlin-connected elite. Since then, U.S. and Western allies have seized billions of dollars’ worth of assets owned by Russian oligarchs, including luxury yachts, mansions and jets.
The provision supported by Democrats would authorize the attorney general to transfer the proceeds of Russian properties in U.S. possession to Ukraine “to remediate the harms of Russian aggression towards Ukraine.”
The Biden administration is negotiating the terms of a plan to impose a cap on Russian oil prices to reduce cash flow to the country as oil exports continue to feed Russian President Vladimir Putin’s war chest. But it has not yet finalized details with Western allies over how the complex mechanism would work, and the administration has been resistant to back enforcement efforts.
To help enforce the price cap, Sen. Patrick J. Toomey, the ranking Republican on the Senate Banking Committee, along with Sen. Chris Van Hollen (D-Md.), recently proposed secondary sanctions on foreign companies that trade Russian oil and countries that have increased purchases of Russian oil. Toomey has praised the Biden administration’s work to impose a price cap on purchases of Russian oil but does not believe the cap alone is sufficient to inspire cooperation from other countries.
“It is possible that these Republican staffers are blocking the provision because they think we will engage in some kind of horse trading down the road,” said a Democratic staffer close to the NDAA process. “I wonder if their bosses know that they are asking for a ransom on assets we are trying desperately to get back to the people of Ukraine.”
Since Russia’s invasion of Ukraine on Feb. 24, the United States has provided $17.9 billion in military assistance to Ukraine.
On Friday, Secretary of State Antony Blinken announced the provision of an additional $275 million in military assistance, including missile launchers, precision-guided munitions, anti-armor mines and other equipment.
Biden administration officials expect to face more difficult scrutiny of U.S. aid to Ukraine if Republicans take control of the House, particularly when it comes to budgetary assistance, which many Republicans say should be provided by wealthy countries in Western Europe rather than the United States.