posted at 8:01 pm on September 18, 2016 by John Sexton
Remember the story of the cash payment to Iran which the Obama administration swears was definitely not a ransom payment? The official explanation for why that payment had to be made in cash came from President Obama himself who said, “The reason that we had to give them cash is precisely because we are so strict in maintaining sanctions and we do not have a banking relationship with Iran that we couldn’t send them a check and we could not wire the money.”
Yesterday the Treasury Department admitted it made two separate wire payments to Iran, one before and one after the delivery of the $400 million in cash in January. From Politico:
In July 2015, the same month in which the U.S., Iran and other countries announced a landmark nuclear agreement, the U.S. government paid the Islamic republic approximately $848,000. That payment settled a claim over architectural drawings and fossils that are now housed in the Tehran Museum of Contemporary Art and Iran’s Ministry of Environment, respectively. Then, in April 2016, the U.S. wired Iran approximately $9 million to remove 32 metric tons of its heavy water, which is used to produce plutonium and can aid in the making of nuclear weapons.
Politico reports the payment in cash was specified in the January agreement because Iran, “was very aware of the difficulties it would face in accessing and using these funds if they were in any form other than cash.” So it sounds like we did this at Iran’s request. But Republican Sen. James Lankford says cash has another advantage for Iran:
“Oh, I don’t have any question that Iran wants the money in cash because they wanted it faster than what a wire transfer would be and it’s fungible,” Lankford said. “They announced pretty quickly afterward that they were expanding their defense and their military budget by $1.7 billion dollars, an exact amount that we had just sent over to them. So I don’t think that was accidental.”
“But when you give cash, we can’t track,” he continued. “Did that go to Hezbollah? Did that go to the Russians? Did that go to the coup in Yemen? There’s no way to be able to track that.”
So there you have it. President Obama’s explanation was that such a transfer was not possible because of sanctions. The truth seems to be that it was possible but that Iran preferred cash, possibly because it made it easier for them and also possibly because it made it harder for us to track what they did with the money. But the bottom line here is that the President’s explanation doesn’t completely hold up. We gave Iran cash because that’s what they wanted, not because we had no other options at the time.