Issue in Focus
Sep 09 2016
On January 17th of this year, three Americans were released from Iranian government custody in Tehran and boarded a Swiss Air Force plane, which took them out of the country. Only after that plane left did U.S. officials then send a cargo plane carrying $400 million worth of euros and other foreign currencies to Iran.
At the time, senior U.S. officials said the American prisoners were secured thanks to a “prisoner swap.” And the U.S. did release seven Iranian nationals who were in U.S. custody.
But no mention was made of the $400 million cash payment to Iran until The Wall Street Journal broke the story on August 3rd. The Obama administration’s desire to keep the payment secret is understandable for two reasons.
First, it sent a signal to the rest of the world that President Obama has abandoned our nation’s long-standing policy of never rewarding hostage-takers with ransom.
Now President Obama has since insisted that the $400 million payment was simply part of an effort “to clear accounts on a number of different issues” while he was negotiating his nuclear deal with Iran. Specifically Iran had claimed for more than 35 years that the U.S. owed it upwards of $10 billion for weapons it never delivered to Shah Mohammad Reza Pahlavi back in 1979. The $400 million, Obama claims, was just the first installment of a $1.7 billion settlement of that issue.
But Obama’s convenient explanation does not explain why U.S. officials held the $400 million until the American prisoners were released. In fact, State Department spokesman John Kirby admitted on August 18 that the $400 million was withheld from Iran “to retain maximum leverage until after American citizens were released.”
More importantly, the Iranians understood the $400 million payment as a ransom. Not only has state media in Iran quoted Iranian Revolutionary Guard commanders calling the payment a ransom, but Iran has since captured more Americans.
The second reason Obama would want to keep the cash payments secret is that Iran is still designated as a state sponsor of terrorism and federal law prohibits the “supply, directly or indirectly from the United States, or by a United States person, wherever located, of any goods, technology, or services to Iran or the Government of Iran.”
$400 million is one heck of a “good” or “service.”
While federal law also allows “all transactions necessary … to payments pursuant to settlement agreements entered into by the United States Government” in a legal proceeding, the Obama administration has never claimed they were using this loophole. And if Obama did give Iran the $400 million pursuant to this loophole, then why did he make the payment in euros and other foreign currency? Why not just give the Iranians U.S. dollars?
The administration has not answered any of these questions, which is why Sen. Ted Cruz (R-TX) and I sent a letter to Secretary of State John Kerry, Treasury Secretary Jacob Lew, and Attorney General Loretta Lynch demanding answers.
The administration has had our letter for almost a month now, and if they don’t answer in a timely matter, I will press for a Judiciary Committee hearing on the matter.