Chairman Royce on Reports That Obama Secretly Sent $400M to Iran: ‘It Keeps Getting Worse’

By Patrick Goodenough | August 3, 2016 | 4:30 AM EDT

Secretary of State John Kerry and Iranian Foreign Minister Javad Zarif led the U.S. and Iranian delegations at the nuclear talks, photographed here at the Palais Coburg in Vienna on July 3, 2015. (Photo: State Department/ Public Domain)

(CNSNews.com) – Republicans lashed out Tuesday at the Obama administration over a news report claiming it airlifted $400 million in foreign currency to Tehran on the same day the regime released five imprisoned Americans.

On that day in January, the U.S. agreed to settle a 37-year-old Iranian legal claim worth $400 million, plus an additional $1.3 billion in interest. The two developments also coincided with the “implementation day” for the nuclear deal struck between Tehran, the U.S. and five other nations.

The administration has long denied that the $1.7 billion settlement was related to the prisoner releases, or that it amounted to a “ransom.”

The Wall Street Journal reported that the cash, in European and other currencies, was secretly flown to Iran on wooden pallets in an unmarked cargo plane, and that it was a first instalment of the agreed-upon $1.7 billion payout.

Citing U.S. and European officials and congressional staffers who had been briefed later, it said the U.S. had sent the equivalent of $400 million to the Dutch and Swiss central banks, where it was converted and provided in foreign currency, then flown to Iran.

The report quoted State Department spokesman John Kirby as reiterating the administration’s denial of any link between the payment and release of the imprisoned Americans.

The two negotiations, he said, “were completely separate” and were also handled by different teams.

House Foreign Affairs Committee Chairman Rep. Ed Royce (R-Calif.) wondered Tuesday what else the administration has not revealed regarding its dealings with Iran.

“The logistics of this payment – literally delivering a plane full of cash to evade U.S. law – shows yet again the extraordinary lengths the Obama administration will go to accommodate Iran, all while hiding the facts from Congress and the American people,” he said.

“Hundreds of millions in the pockets of a terrorist regime means a more dangerous region, period. And paying ransom only puts more American lives in jeopardy,” Royce said. “We already know the Iran nuclear deal was a historic mistake. It keeps getting worse. What else is the Obama administration hiding?”

On February 3, Royce asked Secretary of State John Kerry in writing for details about the $1.7 billion payment to Iran. 

After receiving – a month and a half later – what he characterized as an “incomplete” response from assistant secretary for legislative affairs Julia Frifield, Royce sent Kerry another letter, asking again for details, including “detailed information as to how this $1.7 billion payment was processed and delivered to Iran.”

Royce said Tuesday he has yet to hear back from the State Department in response to his second letter.

(Royce wanted details about exactly how payment was made, in part, because of concerns about Iranian access to the U.S. financial system and ability to conduct business in U.S. dollars. According to the WSJ report, the cash received by Tehran was all in foreign currency.)

Most of Frifield’s letter to Royce last March comprised background on the Iranian legal claim, which arose from weapons supply agreements struck shortly before the fundamentalist clerical regime took over in 1979.

Her three-page letter did not once mention the release of the imprisoned Americans – despite Royce having asked about that at some length.

‘Tough, principled diplomacy’

The Americans released at the same time as the nuclear deal took effect and the payment was made were Washington Post reporter Jason Rezaian, who had been convicted of espionage; Pastor Saeed Abedini, serving an eight-year term after being convicted of “crimes against national security”; former U.S. Marine Amir Hekmati, sentenced to death (later overturned) for spying; researcher Matthew Trevithick; and an Iranian-American, Nosratollah Khosravi-Roodsari.

Kerry at the time strongly denied that the payment and releases were linked.

He told CNN’s Wolf Blitzer the claim payout was “completely separate from what we were doing with respect to the nuclear agreement,” and that the nuclear deal and the prisoner release were “not linked distinctly.”

Sen. Tom Cotton (R-Ark.), who appeared on Blitzer’s show after Kerry, wondered whether the $1.7 billion payout was “just part of the ransom that we had to pay to get innocent Americans back from Iranian captivity.”

Two days later, the head of Iran’s Basij militia said in a speech that the U.S. had agreed to pay the money to buy freedom for what the semi-official Fars news agency called “its spies held by Iran.”

Fars headlined its report, “Basij Commander: U.S. Bought Freedom of Spies by Releasing $1.7 bln of Iran’s Frozen Assets.”

White House press secretary Josh Earnest, asked at a briefing at the time whether it was “an absolute coincidence that this payment just happened to coincide with the precise moment when the American prisoners were flying to freedom,” replied that implementation of the nuclear deal had “created a series of diplomatic opportunities for the United States that we’ve capitalized on.”

“And we used that opening and we used that deeper diplomatic engagement to secure the release of five American citizens who are being unjustly held inside of Iran,” Earnest said.

“And we used that diplomatic opening to resolve a longstanding financial claim that the Iranians had against the United States.”

Earnest during that press briefing used the adjectives “tough [and] principled” seven times to describe the administration’s diplomacy regarding Iran.

On Tuesday Sen. Marco Rubio (R-Fla.), another arch-critic of the administration’s Iran policy, said in a tweet that “[s]ince Obama paid ransom to Iran at least two more Americans [have been] taken hostage.”

Robin Reza Shahini of San Diego, Calif. was detained while visiting his mother in Iran. Baquer Namazi, an 80-year-old Iranian-American citizen was reportedly arrested in Tehran in February.

Still unaccounted-for is the former FBI agent, Robert Levinson, who went missing in Iran nine years ago.

Patrick Goodenough
Patrick Goodenough
Spencer Journalism Fellow