♪ >> intelligence agency officials testified before a house committee today about national security threats. watch tonight at 9:30 p.m. eastern on c-span, online at c-span.org or full coverage on our free video app c-span now. n o'toole, a senior fellow at the atlantic council, senior vice president and director of sanctions and screening for truett financial corporation. thank you for your time. guest: great to be here. a quick note, it is the olanta

counsel for purposes today. host: as far as the purposes of sanctions are concerned, explain your background as far as what you have done in the work of sanctions. >> i have spent much of my career doing work in illicit finance, started at the central intelligence agency back in 2003, and joined the treasury department in 2009. i was there for eight years in all variety of sanctions related matters and spent a good chunk of the time as chief of staff senior advisor at the office of foreign assets control and treasury, which is the office to implements u.s. economic sanctions and enforces them. host: we expect an announcement from the president today concerning potential sanctions for russian oil. can you walk us through up until this point how that is formed when the white house imposes sanctions on another body? guest: so there's a whole bunch of ways it can happen. it can come top down and come

from the white house in terms of trying to figure out options for solving any sort of follow -- foreign policy. or can come from the bottom up depending on where people are seeing issues, issues like organized crime, trafficking, basically at these interagency meetings that the national security council can use to get everybody around the table to discuss options for dealing with problem acts and problem acts right now is rush and occasionally ukraine. for a long time it has been russia's aggression abroad, aggression internally, and how to deal with that has often involved sanctions. in this particular case with oil and reported upcoming restrictions, what will happen typically as folks will sit around the table and discuss the ways russia is weak compared to the united states. typically those involved in the

financial is immensely powerful in that world. the rate -- and the way russia generates revenue like oil and gas account for 40% of the russian budget and so you want to kind of take advantage of sanctions -- you want to hurt the other guy more than yourself so you take advantage of an asymmetric advantage. then you look at how you can mitigate impacts where russia might have leverage, and that is what the discussion has probably been for the last few many days -- last many days across the pond and elsewhere, this discussion of, we need to go after the oil to really get at the heart of the russian economy in a lot of ways or at least the power levels -- leverage that the kremlin controls. and how do we mitigate the impact to the western consumers and global economy? as economic growth goes up,

economic -- host: who's at the table so to speak from the cabinets point of view and how much of this work is delegated to other people when the sanctions are developed? guest: they do a lot of the research from kind of the expert civil service level. so you get these options papers that layout we can do this or this, depending, and these are the advantage ends -- advantages and disadvantages of each. so you have real experts spending careers working on these issues. then the decision-making kind of goes up to something more of a political level, to narrow the options down or give approvals to pursue further research on whichever option seems to be preferable. ultimately at the end of the day, especially for something as important as this decision as the president who makes the call around the table with the vice president, the secretary of state, secretary treasury, secretary of commerce, and a

number of other officials who have -- advisor to excel of and will be in those discussions -- people who know the landscape and understand what the reverberations will be for those decisions. host: brian o'toole from the atlantic council joining us for this discussion. if you want to find out about the sanctions, ask questions about it. you can call (202) 748-8000 for, (202) 748-8001 for republicans, and independents are (202) 748-8002. and text us at (202) 748-8003. for the amount of sanctions you have seen so far, based on russia and those associated, how do they compare historically as far as the amount and impact of sanctions? guest: the amount is always a weird way to quantify it because you can go by the number of individuals designated, but you can designate 1000 terrorists and not have the same impacts as any large bank in terms of economic impact.

so that is a bit of a weird measure. the sanctions that have been imposed on russia in the last several weeks are a -- i get tired of saying this word -- but they are unprecedented. there is nothing like it in the history probably. russia's economy is one of the largest in the world, though dropping dramatically. it is globally indicated -- integrated and has big banks and financial institutions. you can go down the list. it is very different than other places. in terms of -- if you think about sanctions as a continuum, a zero to 100% of the impact imposed, i always think of iran and north korea and somewhere around 95%. i was a russia is somewhere around 70 to 75% of the moment, just quite left to do -- quite a lot left to do in terms of energy and there are those countries that have a broad financial burden and cannot do business with those countries

with limited exceptions. russia is not there yet. it's an a very different place and cut -- and could end up there. as far as the nominal impact, it is enormous because of the size of the russian economy. there is still quite a lot left to do. host: as far as financial institutions, in dealing with sanctions, how do they get fraud into the process? guest: u.s. financial institutions are often the front line of defense for u.s. sanctions. they are the ones who affect transactions overseas, which is where a lot of the sanctions nexus occurs, you are transferring money to a company while conducting business, things like that. so banks are an obvious funnel point and banks are where the u.s. has a huge strategic advantage. when it comes to imposing sanctions on russia, banks are an obvious target because they

are a proxy for the economy. oil and gas might have a huge portion of the russian budget and russian perceivable's, foreign exchange earnings, tetra. banks have a ripple effect through the a cot -- through the entire economy were not only those will have. the u.s. a few weeks ago went after the largest bank, second-largest bank, and those two banks have huge presence in the economy. in terms of total assets, it shares the entire russian banking sector, those two comprise something like 45% to 50% by themselves, an enormous concentration of the sector of those two banks. those sanctions have huge effects, and on the other sanctions, especially central bank of russia, have caused real panic in russian markets. russia kept its markets closed for the last week and it will open up wednesday, presumably to

any absolute firesale probably. that will have a big impact across the economy and an impact on whether those banks have enough money to reduce lines at atm's. there -- the banks are often a good target because of the and scope of impact throughout the economy. host: let's hear from ralph, washington, dc, independent line. hello. caller: hi. this is absolutely insane. weren't you telling people the price of fertilizer would go up three times? or we would be paying seven dollars or eight dollars per gallon for gasoline, or our food processors would get more expensive. you guys want to put sanctions on everybody. this is like it is an art form. we started this. putin, we had an agreement with russia that we would not put nato on their borders and then we keep pushing nato into ukraine, he warned us time and

again, and i'm watching the news media with all of the left-wing clowns saying while this is horrible, we can't invade a country without reason. we have to look back beyond iraqi were mass destruction didn't exist for false reasons? they are about to launch attacks on russia from poland. poland is a nato country. what you think russia will do once we do that? we are not just going to give them planes, we decided we will launch them from a safe airbase. host: thank you. guest: mr. o'toole. guest: your points are inaccurate in a few places, not least the idea that poland will launch attacks on russia. that is just not true in any way, shape or form, nor is there a promise that there would be no troops on russian borders. a setting those aside, there are real economic impacts when you talk about sanctions on a

country like russia. that is absolutely a fair point to make. i think when you are a western policymaker, you end up a lot of times or any policymaker you end up in having to choose the least worst option. economic impacts are often unavoidable, and in a case like this, the combined west, including the g-7 countries, canada, japan as well, switzerland has joined in on this. they have decided and made the calculation that what is going on in ukraine and the assault on kind of the western democratic order, the rules-based system that kept this world largely peaceful since 1940 five and provided unprecedented economic growth is worth defending. that sometimes we have to pay an economic price or the ukrainians are paying with their lives. host: you talk about the impact when it comes to those in russia, particularly vladimir putin himself. what effect do you think you will directly feel from the

sanctions? guest: that's a little hard to figure out putin sometimes because he -- it is highly unlikely he will choose to sacrifice any of his comforts or his wealth in exchange for helping out the russian people. but look, there will be massive economic ramifications across russia without a doubt. you are already seeing it in the ruble and as your previous guest mentioned, falling off a cliff. russian stocks are down in pennies, spare bank, the largest bank in russia, has been waited at -- trading at $20 and $21.50. these have real economic impact. inflation in russia, there has been shortage, talking of pegging russia's currency since they have $130 billion in reserve that has wiped out a lot of russian -- in line a huge

impact on russian business, russian consumers, russian economy. i suspect there will not be a lot of impacts to putin personally because he will always control power as long as he sits at the head of that very long table he's got. and that is a choice he makes. he chooses himself and his cronies over the russian people every time. i would not expect that to change. so the impact to putin is he sees his army having trouble in ukraine, sees his economy struggling, his people around him potentially starving, a little unhappy. there have been slightly louder piece from some of the rich oligarch class in russia about the impact of sanctions and the password business and perched's -- business interests have been impacted. it is not much in terms of a

political challenge to putin. we will see how it plays out, but he will still have his palace on the black sea that he can visit, he will still have his planes and is very long fancy table. host: as far as the oligarchs are concerned, one of the themes you have seen is the fascination with super yachts. like out of a factor into all of this? guest: yeah. they are symbolic in some ways, but as my colleague, the former ambassador and sections coordinator at the state department said, it is a state matter and seizing a $600 million mega yacht, super yachts, whatever you call it, boats that have smaller yachts of their own attached, those are symbols that that can be important. as the previous color mentioned, sometimes what people cr increases in prices at the pump and increases -- what people see our increases in prices at the

pump and increases elsewhere. these are having impacts. there is a very rich man who made his money off the back of the russian people. host: julie in illinois, independent line. caller: hi. i have a couple of questions. the first is that i wanted to know why it was so easy to put a sanction on the american people by cutting off the pipeline, yet it seems so hard to put it on other countries or that we cut off the pipeline. i'm not understanding why it is so easy to sanction the american people but not sanction other countries. by stopping what we buy. guest: i gotta admit, i'm not sure what pipeline you are referring to and statutorily, the u.s. cannot sanction u.s. people that easily. if you are referring to the keystone pipeline, that was an

export pipeline for oil coming down from canada i believe. in any event, it is hard to stomach increased prices, and while you don't have to think about domestic politics a lot of times in situations like this, it is unavoidable, but people paying higher prices in the pump will impact in november and that is the calculation. there is a balancing act the administration has to take between environmental and economic concerns -- environmental, economic, and foreign policy concerns. host: from arizona, james, republican line. go ahead. caller: hi. i'm calling from arizona. i got a couple of questions, statements i want to make. when we do all of these sanctions and everything, and we are having gas prices the way we are going right now, what is going to be the repercussion on our navy ships and military

aircraft that need these to fly? you cannot put electric data into an f-35. i'm sorry a disk racing at the way i am, but why are we not sanctioning our southern border as well because of all the fentanyl coming into this country echo this is insanity, and everybody just wants to turn a blind eye to everything. i live 30 miles from the border and it is incredible what is going on over here. thank you. guest: thanks, james. the military's purchase of fuel is factored into market price so i don't think our role -- there will be any this rupture into navy ships, fighter jets, or anything like that. those things get factored into the market price. as far as the southern border,

there are a huge number of sanctions on traffickers working -- traffickers. working with mexico is sometimes difficult because of the counter drug authorities and the like but it is not something people would turn a blind eye to. i would note that about half of the u.s. sanctions list is made up of narco trafficking designations, somewhere around half or may be these days. it is a big focus for the administration, just gets a lot less -- it has been a focus of the administration for as long as i have been doing this for 20 years. it just gets a little less attention than it deserves sometimes. host: if the sanctions are place upon russia, including the one today, could russia turn to other countries to help him out -- help them out? guest: not with any great success. the china question has been there for a long time, but russia -- look, even if russia can turn to china, they can

really only deal within the chinese currency. the only thing they buy from china -- they trade surplus with china because they sell more to china than they buy. the primary thing that russia imports from china are electronics. a fair amount of those will get cut off -- cut off an export control restrictions that may make them unavailable to export to russia in the first place. even if china wanted to help russia, and i'm not so sure china wants to because russia is a sinking ship economically, there is not much russia can do with a bunch of chinese currency. it will not be useful to them. they can certainly not capitalized with banks or otherwise finance their economy through chinese credit. that is not what china does economically, and they do not have the currency reserves to do that. host: let's hear from barbara in pennsylvania, democrats line for brian o'toole. good morning. caller: good morning, mr.

o'toole and "washington journal." i would like to know if you think it would be a good time for nato to let the countries joined nato, because it seems like putin -- that is one of the reasons he is warning those other countries that he can't control them yet. and if they were in nato, they would be able to be protected. guest: it's a very good question. i thing there has been interest in certain public opinions in some of the nordic states having going up quite a bit in terms of folks favoring joining nato as compared to even a month ago. nato is open for applications as i understand. i'm not a nato or military expert, but it is a complicated consideration that has to do with in operability forces, issues of that interest.

it is a little more complicated than does so-and-so want to join and would it make them safer. but it is still i think something that nato is open to, if the right conditions are met. in those conditions are often on a case-by-case basis. guest: from hawaii -- host: from hawaii we hear from dean on the independent line. caller: good morning. it seems like what we really want to do is hurt putin and russia for what they have done, and it seems like the only way to do that is to lower the price of oil. it is just going to get sent to different countries. so i have a little solution here. what if we invoke the defense production act domestically, put oil on the market, and in essence it will lower the price -- in full cost opec to have to

lower their prices because we are adding more production into the world and economy. what do you think of that? guest: thanks for the question. i'm not exactly a domestic energy expert, but it is not that easy to just been up oil production and turn it out. it takes -- i think one of the challenges is the west faces a short-term spike in prices. it is this short-term most concerning because it will level off as others increase production, including u.s. producers, whether that be shale or otherwise be a die do not know if the defense production act would be useful or not in certain stances. it may or may not be. but the idea that we would be able to fully offset moving russia's oil entirely through market through u.s. production, i'm not sure that is realistic, but i do think the administration is looking at different ways to canned tamp

down the price as much as it can and certainly increase production in the u.s. is what they have been looking and talking about. host: you talked about the white house approach, the sanctions. before this, we heard about congress developing their own. what is the process for them versus the white house? guest: the congressional sanctions process is much like any other bill, it is going up through committees, it can come out of two places in the senate and typically one place in the house in terms of committees, and then it goes up for floor votes and everybody attaches amendments to it. then you can get a standalone sanctions bill. so with iran, you've got a bill passed in 2017 targeting russia and iran. there are all of the standalone sanctions that happen. congress will consult with the administration, call the experts of treasury, state, and talk to them about the effectiveness and

operability of certain sanctions, passages, to try to make sure what they are doing works. especially works the way they intended, since that is often a little difficult to do. the other way sanctions can come about is you see a fair amount of sanctions legislation getting past, things like the national defense authorization act, the department funding bills, reliably passed bills every year. you see things get hung on bills like that, to get past whether they are iran sanctions or other sanctions. those are typically the primary vehicles. congressional sanctions authorities then operate either as standalone nor in conjunction with sanctions that any administration passed. if you think about iran's sanctions, there is this complicated overlay of things commerce has done and various administrations have done and

they are all jumbled together in a unified set of regulations that get enforced. host: when it comes to those administration sanctions, how complicated is it that when other countries are involved -- then when other countries are involved? guest: especially other countries that have different types of authorities where you cannot get at the exact same targets, from the u.s. perspective and some of the points i have been trying to make for a while, the top level policy matters more than becoming the unification of sanctions lists and people sanctioned and things like that. in the u.s. and european union, u.k., britain, and canada and japan have all been kind of remarkably consistent, much more so than in the past. outside of the united nations context and the you and can pose sanctions as well. -- the u.n. can impose sections as well. the countries get together and talks about the approach and

types of things they want to go after an targets they would consider, then execution is a separate matter because it works differently in different countries. in the european union, it is its own animal, but it can be a complicated dance. there's a lot of diplomatic work and time that folks spent in meetings with those folks to unify the policy and messaging. host: last call, joshua, republican line. caller: hi, brian. comrade joe, brandon biden, put sanctions on the american people his first day in office. he did the paris climate accord. if we made everything here, the electric cars, the windmills, and the solar panels, we would be rebuilding america, but they

do not work for us. they work for all of these foreign countries. they even work for vladimir by raising the gas prices up where donald trump had the gas, the barrel of oil -- barrels of oil to the negative. america, wake the heck -- host: ok, we will leave it there. mr. o'toole, as far as the announcement later today, the president, particularly what we will be paying attention to from that announcement? guest: i think we will be looking at the way they implement any sort of oil cut off from russia, whether it is via import restrictions managed by the agencies who oversee those, to whether it is actual sanctions against the russian exporters themselves, which may have broader implications for their dealings, especially in oil fields in russia where western companies have been

joint venture partners, and in any sort of wind down or carve out pieces of that which give you some period of time to implement. typically where there is a supply chain involved, the administration will take an approach that lets ships get to their destination off of cargoes and that sort of thing. looking at the particulars around it to understand what the real impact is, and whether it will go broader, i think the other big question is how and whether they do the european union and how they manage. the people consumes a lot more russian energy than the u.s. does. russian energy in the u.s. is relatively minor, but it is a bigger lift for the european union to make similar action here. so figuring out how they will for the needle will be very interesting. host: brian o'toole of the atlantic council, senior

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c-span. pres. biden: the russian military has begun a brutal assault on the people of ukraine. without provocation, without justification, without necessity. this is a premeditated attack. >> c-span has unfiltered coverage of the u.s. response to russia's invasion of ukraine. bringing you the latest from the president and other white house officials. the pentagon. and the state department. as well as congress. we also have international perspectives from the united nations and statements from foreign leaders. all on the c-span networks. online at c-span.org or on the free c-spannow mobile video app. >> this morning, congressman hakeem jeffries who chairs the house democratic caucus briefs reporters in the capitol. that's up next followed by a news conference with hse