Sen. Cotton: $1.7B Iran Payout May Be ‘Ransom’ for Americans’ Release

By Patrick Goodenough | January 19, 2016 | 4:24am EST
An Iran Air plane is visible on the tarmac at Vienna international airport as Secretary of State John Kerry arrives in the Austrian capital on January 16, 2015 for talks with his Iranian counterpart, Foreign Minister Mohammad Zarif. (Photo: State Department/Flickr)

( – Sen. Tom Cotton (R-Ark.) suggested Monday that the U.S. settlement of a 37-year-old legal claim that will leave the Iranian regime $1.7 billion richer may have amounted to part of a “ransom” for the release of five Americans held in Iran.

Secretary of State John Kerry took pains in several media interviews to stress that three major weekend developments related to Iran were unrelated.

They were the arrival of the nuclear deal’s “implementation day” and ensuing lifting of sanctions; the release of pastor Saeed Abedini and four other Americans incarcerated in Iran; and the settling of the outstanding Iranian claim worth $400 million, plus an additional $1.3 billion in interest.

Kerry 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 prisoner release were “not linked distinctly.”

He also told Fox News it was “absolutely a coincidence” that the nuclear deal sanctions relief and release of the prisoners had occurred on the same day, explaining that the release could in fact have taken place several months ago, but was delayed by “a snag.”

Cotton, who appeared on Blitzer’s show after Kerry, noted that the secretary of state had said the $1.7 billion payout was a “stand-alone agreement” and not part of the nuclear deal.

“Unless,” Cotton said, “it’s just part of the ransom that we had to pay to get innocent Americans back from Iranian captivity.”

According to Kerry, the $400 million was the value of a trust fund used by Iran’s pre-1979 government to buy arms from the United States. After the Islamic revolution, it was frozen when regime-backed students seized the U.S. Embassy and took 52 Americans hostage.

“That $400 million, under the law, collects interest compounded over the years,” he added.

Kerry characterized the $1.3 billion in interest as a bargain for American taxpayers, saying that the U.S. was actually “liable for about $6 billion or so.”

The negotiations that resulted in the $1.7 billion settlement were carried out through a bilateral claims tribunal set up by the Algiers Accord, a deal struck with Tehran in the closing days of the Carter administration that led to the ending of the 444-day hostage crisis.

Controversially, the Algiers Accord also prevented the 52 freed hostages from suing Iran, and U.S. administrations over the decades since then have wielded that provision to block lawsuits.

Blitzer asked Kerry whether the U.S. in discussing the Iranian claim had brought up the issue of compensation for the 52 Americans.

“Did you raise the issue of the 52 American diplomats held hostage?” he asked.

“We’ve constantly talked about that and other things,” Kerry replied.

“Are they going to pay any?”

“I can’t tell you what the outcome is going to be because I don’t know.”

Cotton took issue with Kerry’s reasoning, noting that the deal involved weapons sales to a pro-American government in Tehran which was then overthrown in the violent Islamic revolution.

“And we’re rewarding them now by giving them back that previous regime’s money – with interest,” he declared.

Picking up on Kerry’s comment that the $1.3 billion in interest was required under the law, Cotton said, “I’m not sure which law he’s referring to, but it sounds to me like he’s more interested in being the lawyer for the government of Iran than he is for standing up for” the rights of the 52 former hostages.

‘An astonishing figure’

As for Kerry’s assertion that the $1.3 billion interest was a bargain – that the U.S. may have been liable for more than four times that much – Cotton was dismissive.

“I’m pretty confident that we’ve been able to avoid that kind of adjudication for 36 years now, that we’ve got very good lawyers in our State Department that could prevent that,” he said, adding “if in fact it is about an arms deal that was never consummated, and not about something else.”

Cotton also suggested Iran could use the $1.7 billion windfall to boost its terror-sponsorship and destabilizing behavior in the region.

“The roadside bombs that Iran sent to Iraq to blow up over 500 American soldiers cost a lot less than $1.7 billion,” he said. “The troops that they’re supporting in Syria right now supporting innocents and undermining the entire region only cost a few hundred dollars a month. The terrorists they support in Hezbollah only cost tens of thousands of dollars on a weekly or monthly basis.”

“$1.7 billion is an astonishing figure.”

In a statement delivered from the White House on Sunday, President Obama also depicted the payout to Iran as a good deal for U.S. taxpayers.

“Iran will be returned its own funds, including appropriate interest, but much less than the amount Iran sought,” he said.

“For the United States, this settlement could save us billions of dollars that could have been pursued by Iran.  So there was no benefit to the United States in dragging this out.  With the nuclear deal done, prisoners released, the time was right to resolve this dispute as well.”

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