It was revealed last month that in January the Obama administration had paid $400 million to Iran to resolve a dispute over an arms deal that went bust in 1979. A few days later the State Department shipped another $1.3 billion to the Islamic Republic for the interest on that amount.
Because the initial payment arrived on the same day that Tehran released four American hostages, it rsuggests that the payment was essentially a ransom. Iran saw it as such, and Justice Department officials objected to the payments for that reason.
More questions were raised last week over the $1.3 billion. Strangely, the money was delivered to the mullahs in 13 installments of $99,999,999.99 drawn from a special State Department account known as the Judgment Fund. State can dip into the account to pay foreign claims against the U.S. without getting congressional approval.
So why were the payments kept just a penny under $100m? If the State Department were a private entity, it might be charged with the federal crime of “structuring,” for which former Speaker of the House Dennis Hastert now sits in prison.
Structuring involves making financial transactions in a pattern so as to avoid triggering federal requirements for the creation of certain records and reports. Structuring laws usually target drug dealers, tax fraudsters and other criminals who attempt to move large amounts of money undetected, often by breaking them into smaller sums.
In Hastert’s case, he made secret blackmail payments to a man who had accused him of a sex crime decades earlier. Hastert kept the payments under the $10,000 threshold that would have required reporting the transactions to the federal government.
Another question has to do with how the money was transferred. Was it delivered in cash on pallets, as the initial $400 million was, or through the Iranian banking system?
President Obama said of the $400m cash payment, “We couldn’t send them a check and we couldn’t wire the money.” But if that’s true, how did the $1.3b get to Iran? The Judgment Fund’s website says the “preferred method” of payment is “via electronic fund transfer.”
The Washington Examiner’s Joel Gehrke reported last week that State refuses to release information on the payments. “We do make a practice of not commenting publicly on transactions, including settlement payments, due to the confidential nature of those payments and to respect the privacy of our international partners,” State Department spokeswoman Elizabeth Trudeau told reporters. She later said she’d misspoken by using the term “privacy,” but reiterated that she couldn’t speak about the payments due to confidentiality.
All of Obama’s interactions with Iran are shrouded in secrecy, designed to hide details and concessions from Congress and the public. But Congress, the branch of the federal government most accountable to the public, controls the purse strings under the Constitution and deserves an answer. The administration must come clean about how and why these payments were made. If it doesn’t, Congress should conduct hearings to find out.
