Sen. Tom Cotton (R-AR) called the $400 million airlifted to the Iranian regime in hard foreign currency in January “ransom to the ayatollahs.”
Details of the transaction were reported Tuesday evening by the Wall Street Journal:
Wooden pallets stacked with euros, Swiss francs and other currencies were flown into Iran on an unmarked cargo plane, according to these officials. The U.S. procured the money from the central banks of the Netherlands and Switzerland, they said.
The money represented the first installment of a $1.7 billion settlement the Obama administration reached with Iran to resolve a decades-old dispute over a failed arms deal signed just before the 1979 fall of Iran’s last monarch, Shah Mohammad Reza Pahlavi.
Cotton and other lawmakers, including Speaker of the House Paul Ryan, have long accused the administration of paying a “ransom” to the regime, contravening long-standing U.S. practice since the days of Thomas Jefferson and the Barbary Wars.
“This break with longstanding U.S. policy put a price on the head of Americans, and has led Iran to continue its illegal seizures,” said Cotton, according to the Journal.
In a March letter to Rep. Mike Pompeo (R-KS) obtained by the Washington Free Beacon, the State Department defended the $1.7 billion deal, including $400 million in principal and an agreed $1.3 billion in interest, as a means of settling claims that Iran had brought before an international tribunal at The Hague in the midst of the negotiations over Iran’s nuclear program. (That tribunal was established in 1981 as part of the original Carter administration deal to release U.S. hostages from Iran.)
The money, the State Department said, was the balance left in a Foreign Military Sales Trust Fund to resolve outstanding claims. The department argued that the deal was actually a “good settlement for the American taxpayer”: “If Iran’s claim for the Trust Fund balance and interest had gone to decision in the Tribunal, the United States could well have faced significant exposure in the billions of dollars … We were able to secure a favorable resolution on the interest owed to Iran … “.
However, given the timing of the settlement, which coincided both with the release of four captive Americans and the larger Iran deal, questions were immediately raised about whether the U.S. had, in fact, paid a ransom. The four Americans were traded for 7 Iranians who had been convicted in the U.S. of violating sanctions, as charges were dropped against 14 others. The flow of cash alongside that deal immediately raised suspicions.
The secretive manner in which the cash was transferred to Iran, avoiding U.S. dollars and traditional banks, in accordance with existing sanctions, has reinforced those suspicions.
Cotton was the lone member of the Senate to vote against the Iran Nuclear Agreement Review Act, also known as the “Corker bill,” which theoretically insisted on the Senate’s constitutional authority to review the Iran deal, but in practice made it easier for the deal to pass simply through a presidential veto of a resolution of congressional disapproval.
Ultimately, Senate Democrats filibustered a vote on the Iran deal.