Boeing on Thursday told two concerned Republican lawmakers that completing a nuclear agreement with Iran hinged on the ability of U.S. and European firms to sell Tehran new passenger planes to replace its aging fleet.
Timothy Keating, senior vice president of government operations at Chicago-based Boeing, told House Financial Services Committee Chairman Jeb Hensarling (R-Texas) and Rep. Peter Roskam (R-Ill.) that Congress was well aware that the sale was passenger jetliners were part of the negotiations of the nuclear agreement.
“It was made clear to us in those consultations that that the ability to provide Iranian airlines with U.S. and European replacement commercial passenger aircraft for their aging fleets was key and essential to reaching closure on the agreement,” Keating responded in a letter.
“The administration reported that this view was shared by our European allies as part of that same negotiation,” Keating wrote.
"All of this is well-known to your offices as part of the U.S. congressional review of [nuclear deal] prior to its implementation,” he wrote.
A week ago, Hensarling and Roskam sent a letter to Boeing CEO Dennis Muilenburg, arguing that U.S. businesses should not take part in “weaponizing” Iran’s regime.
Boeing, which announced the plane deal on Tuesday, said that it negotiated the agreement after it was determined that Iran had met its obligations under the nuclear deal.
But Keating stressed that Boeing would make adjustments if the U.S. government made any changes to the relationship.
“As we have stated repeatedly, should the U.S. government reinstate sanctions against the sale of commercial passenger planes to Iranian airlines, we will cease all sales and delivery activities as required by U.S. law,” Keating wrote.
Any further contracts with Iran also would be contingent on additional federal government approval.
Boeing announced Tuesday that after 20 months of talks the company had signed an agreement with Iran Air "expressing the airline's intent" to buy its aircraft in what would be the biggest business deal between Tehran and a U.S. company since 1979.
As part of the deal, Boeing is expected to sell 80 airliners worth $17.6 billion with deliveries set to begin in 2017 and finish 2025.
Iran Air also intends to lease 29 737s from Boeing.
Iran also is expected to buy planes from France-based Airbus.
Keating also assured lawmakers that the Export-Import Bank is not a financing option for Iran Air because the agency is banned from providing loans to Tehran because of its terror ties.
Despite the nuclear deal, Iran is still listed by the State Department as a state sponsor of terrorism.
Hensarling and Roskam argued in their letter that that Iran's military frequently uses commercial airliners to transport troops, weapons and missiles around the world to groups like Hezbollah and Hamas and President Bashar Assad's government in Syria.
“These terrorist groups and rogue regimes have American blood on their hands,” they wrote. “Your potential customers do as well.”
Roskam, who said he will seek to block the Boeing transaction, introduced on Wednesday tax legislation along with Rep. Charles BoustanyCharles William BoustanyFormer lawmakers call on leadership to focus on unity Partial disengagement based on democratic characteristics: A new era of US-China economic relations Lobbying world MORE Jr. (La.) designed to discourage U.S. companies from doing business with nations that support terrorism.
"It's tragic to watch such an iconic American company make such a terribly short-sighted decision,” Roskam said.
Roskam said the bill would prevent Iran from accessing U.S. dollars by imposing a 100 percent excise tax on any transactions that directly or indirectly enables the country to make financial transactions in American currency.
"The tax code should not allow goods, particularly those with potential military applications like airplanes, to be purchased by the chief agitator and state sponsor of terror in the Middle East,” Boustany said.
“This is a common-sense bill that shuts down the pipeline of American-produced goods and technology to Iran, protecting our regional allies like Israel and strengthening our national security,” he said.
The State Department, which oversaw the sale, said it is the "type of permissible business activity envisioned" under the nuclear deal.