The Corner

National Security & Defense

Besides Being Illegal, Obama’s $400M Cash Payment to Iran Was a Ransom [UPDATED Post]

Despite weeks of Obama administration stonewalling of refreshingly persistent media inquiries about its outrageous – and, I believe, illegal – transfer to Iran of $400 million in foreign currency in an unmarked cargo plane, the Wall Street Journal has confirmed that the payment was, in fact, a ransom payment for the release of American hostages.

The White House and State Department have insisted that there was absolutely, positively, cross-their-hearts no connection between (a) an agreed-upon prisoner swap in which American hostages held by Iran were released, and (b) the settlement of Iran’s claim regarding $400 million (plus interest) withheld by the United States in connection with a failed 1970s arms deal. Obama officials have expected us to accept their say-so that the timing of the payment on the same day as the hostage release was sheer coincidence.

The story has never made any sense, a fact brought into sharp relief by both the shady form of the transaction and the administration’s refusal to answer basic questions about it. Now it is clear that the story doesn’t make sense because it isn’t true.

Among the most basic questions Obama officials declined to answer involved how and when the transfer of funds took place, as well as the sequence of planes taking off and landing. But as the Journal’s Jay Solomon and Carol E. Lee now report, Iran dispatched an Iran Air cargo plane to Geneva. By then, the Obama administration had transferred $400 million in U.S. assets to Switzerland, the Netherlands, and perhaps other helpful European nations, which made the conversion to foreign cash – francs, euros, and perhaps other currencies, that were stacked onto pallets and held at the airport in Geneva under U.S. control.

American officials would not permit the Iran Air officials to take possession of the money and depart for Iran until they received word that a Swiss Air flight on which the U.S. hostages were boarded in Iran was “wheels up.” Only after the American officials were notified that the hostages’ plane had taken off were the Iranians allowed to take custody of the money. As Senators Ted Cruz (R., Texas) and Mike Lee (R., Utah) have pointed out in pressing the administration for answers about this transaction:

Although the administration has denied there was any quid pro quo, the close temporal proximity of the payment to the release of the hostages suggests otherwise.  As the Justice Department is never remiss to point out in court, an illicit quid pro quo can be inferred from the timing of the quid and the quo

The involvement of Iran Air should be of special interest to Congress. Iran Air has long been a tool of the regime’s Islamic Revolutionary Guards Corps. In 2007, the IRGC’s Qods Force was designated as a terrorist entity, and the IRGC as a whole was also designated as proliferator of weapons of mass destruction over its development of ballistic missiles and procurement of technology to support Iran’s nuclear program. As the Foundation for Defense of Democracies’ Emanuele Ottolenghi has recounted, the Obama administration sanctioned Iran Air in 2011 because it is a front for the IRGC and was known to “disguise and manifest weapons shipments [to the Assad regime in Syria] as medicine and generic spare parts,” in addition to transporting missiles and rocket components in contravention of aviation standards. Yet, under Obama’s Iran nuclear agreement, the Iran Air sanctions were removed – notwithstanding that there had been no change, and was no prospect of change, in the behavior of either Iran Air or its IRGC masters.

So to recap, in contravention of federal criminal law that prohibits Americans from transferring things of value to Iran, whether directly or indirectly (including through third countries), President Obama transferred Iran $400 million by laundering American assets into foreign currency and then delivering it – as a ransom for hostages, in violation of American policy – to agents of the world’s leading state sponsor of terrorism, so it could be transported to Tehran by an airline previously sanctioned for abetting terrorism and weapons shipments.

As I have previously argued, there was a way for Obama to do this deal legally, by publicly explaining what he was doing and how he was proposing to do it, and transparently waiving any sanctions. Such disclosure would have been politically damaging, though, so the administration tried to sneak the deal through, hoping the sordid details would remain concealed until Obama was out of office, if not forever.

On that score, as we’ve asked before: What happened to the other $1.3 billion Obama agreed to pay Iran in settling the failed arms deal? If Obama had been forthright about this matter, there would have been no need to give Iran hundreds of millions in untraceable cash that it can use to support Hezbollah and other terrorists without leaving a paper trail. There would have been no need for installments; Obama could simply have wired Iran the full 1.7 billion sum – in dollars or foreign currency equivalent.

The Journal concludes its report by noting that “Obama administration officials have confirmed that they paid the remaining $1.3 billion to Iran. Yet, notwithstanding inquiries from Congress and the press, the administration still “refuse[s] to disclose how the Obama administration made this additional payment.”

What possible good reason is there not to reveal that? And is Congress going to let Obama get away with it?

UPDATE: State Department Confirms $400M Payment to Iran Contingent on Release of Hostages

The Associated Press reports this afternoon that State Department spokesman John Kirby “says a $400 million cash payment to Iran was contingent on the release of American prisoners.” Both the cash payment and the hostage release took place on January 17, 2016.

Kirby repeats the Obama administration’s claim that negotiations over the U.S. hostages were separate from negotiations over the financial settlement stemming from a failed 1970s arms deal. But, according to the AP report, Kirby acknowledges that “the U.S. withheld delivery of the cash as leverage until the U.S. citizens had left Iran.”

Two thoughts. First, will President Obama continue to claim that his administration does not negotiate with or pay ransom to terrorists? Or is that now modified: “We will use cash as ‘leverage’ while negotiating with terrorists”?

Second, Obama obviously used the $400 million for ransom leverage because he did not trust the Iranians to honor their agreement merely to release four hostages. Why, then, would he have us trust Iran to honor its agreement not to seek nuclear weapons when he has given away our leverage (the sanctions); when Iran has been seeking nuclear weapons for years; when, despite his deal with them, the Iranians continue ballistic missile development; and when Obama’s deal will leave them with an industrial-strength nuclear program that they can easily weaponize at any time?

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