I don’t want to be a broken record on the subject of President Obama’s appalling $400 million cash payment to Iran. I am at a loss, however, to understand how the press – and not just the pro-Obama mainstream media – continues to accept at face value President Obama’s preposterous claim that the transaction had to be structured the way it was (U.S. dollars converted to foreign currency and shipped to Tehran) because the law forbids transferring U.S. dollars to Iran.
The regulations that Obama concedes applied to this transaction do not just forbid sending U.S. dollars to Iran; they forbid exactly what the president did. Specifically, they prohibit Americans from transferring any currency to Iran – including foreign currency. They also prohibit circumventing the ban on sending Iran U.S. dollars by having an intermediary launder the dollars into another asset – such as foreign currency – and then shipping that asset to Iran.
That is common sense. If it were not the case, anyone could get around the anti-terrorism sanctions that prohibit conducting financial transactions with Iran – sanctions the Obama administration swore up and down to Congress it would continue to enforce – by simply converting dollars into, say, euros and francs (like Obama did) and then transferring that foreign currency to Iran. Such transactions are against the law. If you tried to execute one, you could go to jail for a very long time – even if the assets you transferred to the world’s leading state sponsor of terrorism didn’t come close to $400 million in value.
The principal point of these sanctions is to squeeze the Iranian regime until it gives up terrorism sponsorship. Consequently, the regulations promulgated to enforce the sanctions prohibit transferring value to Iran. The sanctions are simply another iteration of federal law’s criminalization of material support for terrorism: You are forbidden to send the jihadist regime in Tehran dollars, foreign currency, tangible assets, services – anything of value.
The president and administration officials continue to claim that this cash transfer was a completely legitimate payment and that it was disclosed back in January; therefore, they insist, the administration has been transparent. But if everything is on the up and up, why is it so hard to get information about this transaction? Why has the administration stonewalled Congress on the details of this “wholly legitimate” transfer of untraceable cash via an unmarked cargo plane in the dark of night?
For example: What’s the story with the other $1.3 billion in this deal, the money Iran is supposed to get in addition to the $400 million in cash?
Let’s put aside for argument’s sake my position that it would violate the material-support-for-terrorism laws to make any transfer of cash to this regime, which remains on the government’s list of state sponsors of terrorism (a designation that, as my column last weekend outlines, the Obama administration reaffirmed this year). Absent that prohibition, there was a process by which these funds could have been transferred legitimately – it would simply have required the administration to be open with Congress about what it was trying to do.
The law on which the anti-terrorism sanctions are based gives the president broad waiver discretion. He could have issued a waiver in order to enable our government to pay Iran the interest-inflated $1.7 billion it claims we owe, stemming from a failed arms deal in which the shah paid $400 million to the U.S. shortly before being overthrown by the current regime in 1979. Obama could then have wired the Iranians $1.7 billion in U.S. dollars. Or, if he wanted to pretend that he was strictly enforcing the exclusion of Iran from the U.S. economy, he could have used $1.7 billion in U.S. assets to purchase foreign currency – let’s say euros. He could then have simply had the $1.7 billion worth of euros wire-transferred to Iran – no need to act like a drug dealer and ship piles of untraceable cash.
Why didn’t he do that? I suspect it’s because he would have needed to get the requisite funds from Congress, and he knew Congress would not have approved.
Undeniably, Obama has constitutional authority to conduct foreign policy, even if his policy is reprehensible. But he does not have the power of the purse. That belongs to Congress. If Obama wanted to settle Iran’s claim on the $400 million plus interest – which five previous administrations have obviously declined to settle – he would need the funds to do it. If he had openly and transparently come to Congress for the money, lawmakers would likely have told him: “We’re not appropriating a dime to pay them. They’ve killed and aided and abetted the killing of thousands of Americans since 1979, including the Air Force members they killed at Khobar Towers in 1996, and our troops they’ve helped kill in Afghanistan and Iraq since 2001. They may even be culpable in the 9/11 attacks, according to the 9/11 Commission. You can make whatever executive agreement you want with them – we can’t stop you. But we’re not approving any payment to Iran until Americans who have wrongful-death and other claims have an opportunity to litigate those claims and execute against any Iranian assets in U.S. possession.”
As we know, Obama did not play it straight with Congress. He flouted the Constitution by refusing to submit his Iran nuclear deal to lawmakers, either as a treaty for ratification by the Senate or as legislation to be enacted by the full Congress. And when Congress foolishly helped him by passing a law that enabled him to lift nuclear sanctions (but not anti-terrorism sanctions), he withheld key details from them. Consistent with this disingenuous approach, Obama did not want to ask Congress’s permission to settle Iran’s additional $1.7 billion claim because he knew paying Iran even more money – besides the tens of billions the jihadist regime was to get in sanctions relief – would be politically explosive.
So rather than being transparent, Obama decided to be sneaky.
There was no way Congress was going to approve another $1.7 billion for Iran. Plus, Obama was already overpaying for the hostages Iran was holding: He had agreed to swap several real Iranian criminals in custody, in addition to dropping extradition petitions on several others, in exchange for the release of four American hostages – non-criminals Iran bogusly accused of espionage. But Iran knew Obama was so desperate for a deal that he was an easy mark: The mullahs could make other outrageous demands.
Thus, in addition to the ostensibly agreed-upon prisoner swap, Iran demanded the money from the shah’s failed arms deal. Obama did not have control over the full amount Iran was demanding, but he did have control over $400 million – since it had initially been deposited with the executive branch (the Defense Department) by the shah’s regime. Thus, Obama agreed to transfer this amount as a “down payment” on a purported $1.7 billion settlement (not approved by Congress). Iran agreed that when the money arrived, we’d get our hostages back.
Obama was hoping no one would find out about the $400 million. He figured he’d announce a $1.7 billion settlement, and stonewall Congress, as the administration is expert at doing when lawmakers press for details. Eventually, it might emerge that $400 million had been paid; but at that point, Obama would probably be out of office. Either way, he or the next administration would surely be able to snooker Congress into forking up the other $1.3 billion, maybe in the post-election lame-duck session when no one was paying attention, or maybe in the next omnibus-budget battle – the president knows there are times when Republicans can be rolled into approving just about anything.
So Obama directed whichever agency in the executive branch had control over the $400 million to transfer it to helpful European countries (Switzerland, the Netherlands – perhaps others, too) for the purchase of foreign currency. There probably need not have been any mention of Iran in the documents of that part of the transaction – it could have been presented as just the U.S. government converting assets from one form to another. Then, the president had the foreign cash flown to Iran for delivery in another country’s unmarked plane. With no inconvenient paper trail – such as would have been created if Obama had done a transparent wire transfer of funds – there was at least a chance that neither Congress nor the American people would ever find out that Obama had sent the mullahs cash, which they, in turn, could use to support terrorists without leaving a paper trail.
Of course, I could be wrong. Since the administration has been hiding the details of this settlement for seven months, all we can do is speculate. But if, as Obama maintains, this was a completely appropriate, fully disclosed transaction, where exactly is the disclosure? Has Obama already paid the other $1.3 billion? If not, why not? After all, this is totally legit, right? If so, how was it paid and where did he get the money to pay it? Why didn’t he tell Congress what he was doing?
And finally, why did the president pay only $400 million, and why does he keep saying he did it in foreign currency because the law prohibits sending U.S. dollars to Iran? In point of fact, (a) Obama could have paid the whole $1.7 billion to Iran by an easy wire transfer, with no stealthy cash conversion and shipment, if he had just been honest with Congress and gotten its approval; (b) the law also prohibits Americans from sending foreign currency to Iran; and (c) the law further prohibits converting dollars into foreign currency for transfer to Iran.
This transaction stinks, from beginning to end. If an American corporation had tried to pull it – if it had converted even far, far less than $400 million in U.S. assets into foreign cash in order to purchase goods or services from Tehran – company executives would already be in handcuffs, the Justice Department would have called a bells-and-whistles press conference to announce the filing of one of its 150-count indictments, and Congress would be holding high-profile hearings about how greedy American businesses had endangered national security by enriching an anti-American terrorist regime. Since this latest windfall for the jihad was orchestrated by the president, the public official whose job is to protect national security, why can’t we get answers to basic questions?
A version of this piece also appeared on National Review Online.