Authored by Matt Palumbo
The Obama administration sent $1.7 billion cash to the government of Iran right around the time that five American hostages/prisoners were freed by the Iranian regime on January 17th 2016 – and naturally one would assume those events were connected. President Trump made such a claim while on the campaign trail (and later again this year), and was widely dismissed by the media, and then-President Obama himself for his “conspiracy” theory.
The Official Line of Defense
In response to allegations of paying ransom money, the Obama administration claimed the payments were a return of money for payments (plus interest) that the Iran made to the U.S. in 1979 for military equipment they did not receive. That $400 million went into a Foreign Military Sales trust fund, and that remained untouched since Jimmy Carter froze Iran’s assets in ’79.
Obama personally stated in August 2016 that “We do not pay ransom. We Didn’t here, and we won’t in the future.” He went further, claiming that the payments were completely unrelated. “We announced these payments in January. Many months ago. They were not a secret,” Obama said “It wasn’t a secret. We were completely open with everybody about it.” John Kerry also denied that the payment and freed hostages were related.
So in summary, Obama’s defense is that the cash payment was owed to Iran regardless ($400 million plus 1.3 billion in interest), and the freed prisoners are completely unconnected. How well does that narrative hold up?
The Fact that Payment was in Cash Proves the Events are Connected
Criminal transactions have a tendency to be done in cash, and there’s no exception here.
Paying Iran in cash makes no sense, and the explanation of former Obama Treasury Department official Paul Ahren makes even less sense. During Congressional testimony about the payments, he “explained” that “cash was the most reliable way to ensure Iran received the funds in a timely manner, and it was the method preferred by the relevant central banks.” The supposed logic here is that a wire transfer could be hard to make, as there could be difficulties in a global bank wiling to complete such a transaction.
That apparently wasn’t a concern back in 2015 on no fewer than two occasions. In July of that year, when the U.S. and Iran announced the nuclear agreement, the U.S. paid Iran $948,000 through wire to settle an old claim over “architectural drawings and fossils.” And again in April, the U.S. wired Iran another $9 million to remove 32 metric tons of heavy water (which can help in the production of nuclear weapons).
So why is it relevant that Iran was paid in cash rather than a wire? Control.
Former Obama State Department official John Kirby openly admitted that the U.S. held onto the initial $400 million cash payment until the American prisoners were far away from Iran to “retain maximum leverage” in the situation. Kirby denies that the payment could in any way be called a ransom payment, but he admitted that the payments were in exchange for them. This is in direct conflict with Obama and Kerry’s claim that the payment had no connection to the prisoners whatsoever.
The Payment is Still Ransom, Even Though it was Legitimately Owed to Iran Since 1979
During the time of the nuclear talks, the governments of the U.S. and Iran were negotiating other random unrelated past grievances while they finally were at the table with one another. At least $400 million was owed to Iran (plus interest), and that longstanding dispute was settled in exchange for five hostages. The fact that this debt already existed does not change the fact that it was settled in a ransom-like scenario.
If this payment wasn’t ransom, the U.S. likely would’ve gone through a negotiating process to only pay Iran net of the $400 million in claims we have against Iran for violations of the “Victims of Trafficking and Violence Prevention Act.” And if there was no ransom, why the lying from Ahren, Obama, and Kerry?
Backing up my interpretation of events, is the Iranian government literally acknowledging as much.
Iran Literally Calls the Payments Ransom
A month after the cash delivery, a state-run Iranian TV channel ran a 13-minute mini-documentary called “Rules of the Game,” in which a narrator describes a “cash for hostages” deal. (A translation of the entire documentary can be read *here.*)
“The Iranians had a costly proposal for the swap: the release of seven Iranians imprisoned in America, 1.7 billion dollars, and clearance of the names of 16 Iranians who, on the pretext of violating oppressive sanctions, had been placed on a list of those facing criminal prosecution in America,” the narrator says. “But this was not all that Iran wanted. The removal of Bank Sepah from the sanctions list was also added to Iran’s demands. All of this in exchange for the freedom of only four American nationals: a win-lose transaction in favor of the Islamic Republic of Iran and to the detriment of the American government.”
Well, they got that right.
The narrator also boasts that the payment leaves Obama vulnerable to a Republican backlash if anyone found out about the exchange.
It looks like they got that right too.