The Obama administration failed to inform a number of Democratic lawmakers that a $1.7 billion payment the U.S. sent to Iran earlier this year would be made wholly in cash, according to senators who spoke to THE WEEKLY STANDARD Wednesday.
The payment, which occurred in installments around the time that the Islamic Republic freed American prisoners in January, represents a financial settlement for a decades-old arms deal with Iran gone awry.
“I did not know about [the cash payment], not until after reading about it,” Michigan senator Gary Peters told TWS. “I had no prior knowledge of that.”
Peters said that there was an “understanding” that “some payments” would be made, but did not recall being told that the transaction would occur in cash.
Senator Joe Manchin of West Virginia, who opposed the Iran nuclear deal, said that he did not know that the payment “was happening at all.”
“I was not [briefed],” he said. “I just saw that.”
Delaware senator Chris Coons appeared unsure about whether he had been briefed on the cash component, initially saying “I assume the answer is no,” but changing his response after an aide handed him what looked to be an email print-out pertaining to the payment.
“In January, yes,” the aide said.
Coons then said that he knew of “an outstanding judgment” for the arms sale “that would need to be resolved as part of the resolution of the [Iran nuclear deal], the release of American hostages, and other matters.”
Senator Ben Cardin of Maryland, ranking member on the Senate Foreign Relations Committee, said that he had been briefed on the payment in January. He could not recall whether the cash element had been discussed, but told TWS that the United States used cash because of Iran’s isolation from the international financial system.
“It didn’t surprise me that whatever we do with Iran would be cash,” he said. “International banking institutions don’t want to deal with Iran, and that’s good news.“
Vermont senator Patrick Leahy contradicted his colleagues and said that “almost every senator” was briefed on the payment “months ago.”
The U.S. sent Iran $400 million worth of foreign currency, stacked in pallets in an unmarked cargo plane, in January. The other $1.3 billion, which represented accrued interest, was also paid in cash days later, but taken from a taxpayer-fueled fund that is run by the Treasury Department.
The administration delayed delivering the $400 million installment to Iran until American hostages held there were “wheels up,” sparking criticism that the payment was for ransom. Officials have denied any quid pro quo, but have conceded that the $400 million was maintained as “leverage” to ensure the safe homecoming of American hostages.
The State Department has also said that Iran is “so far” not using the cash for “nefarious activities,” though experts have noted that a hard cash payment would play to Iran’s military ambitions or even fund terrorism.
“It would be far easier for Tehran to procure advanced weaponry from Russia and China, for example, if it can pay for it with hard currency rather than through the formal financial system, having to circumvent the UN arms embargo and U.S. financial sanctions,” according to Saeed Ghasseminejad, an associate fellow at the Washington-based Foundation for Defense of Democracies. “With bags of untraceable hard currency, Iran can more easily support its allies or illicitly procure missile and nuclear parts.”
The administration’s assurances have also not quelled criticism from Republican lawmakers, who this week released a range of legislation related to the payment.
“President Obama may have attempted to appease our enemy with pallets of cash secretly delivered on an unmarked cargo plane, but Iran continues to cheat on the nuclear deal, harass our military, hold Americans hostage, and fund terrorism around the world,” Florida senator Marco Rubio, who introduced legislation related to the payment, said in a statement Tuesday. “Iran should be held accountable, and the Obama Administration’s misguided policies must be stopped.”
