Global Independent Analytics

Top House Republican demands Kerry explain $1.7 billion Iran payment

Keep calm and Kerry on, or the explanation, worth 1.7 billion dollars.

Fox News reporting: the chairman of the House Foreign Relations Committee demanded Wednesday that Secretary of State John Kerry explain a $1.7 billion settlement recently paid to Iran. Some Republicans even used the word "ransom," and in their eyes, it is tied to last month's release of five American prisoners.

Rep. Ed Royce, R-Calif., complained in a letter to Kerry that his committee was not consulted about the settlement. The official claim made by Obama’s administration explained this as a way to settle a dispute with Iran dating back to 1979 over $400 million in frozen funds. The rest of the money, $1.3 billion dollars more specifically, Obama’s administration described as "interest."

"It is unclear how this $1.7 billion payment is in the national security interests of the United States," Royce wrote.

There were 10 questions included in Royce's letter to Kerry about the settlement. The most intriguing of them are how the administration calculated the $1.3 billion "interest" on the payment, a timeline of negotiations over the payment since this past summer's nuclear deal, and why the money was not used to "compensate American victims of Iranian terrorism who have been awarded judgments against Iran."

The letter also directly asks for a list of U.S. officials who were involved in negotiations with Iran over the payment, the prisoner release and the nuclear agreement.

The payment was announced by the White House on Jan. 17. Coincidentally, Iran released five American prisoners, including Washington Post reporter Jason Rezaian, former Marine Amir Hekmati, and Christian pastor Saeed Abedini the very same day.

“Much less than the amount Iran sought."

That’s how Barack Obama defended this transaction after a couple of days. From his perspective, it was better to pay all at one time, than let more “interest” accumulate while waiting for a judgment from the Iran-US Claims Tribunal, which is based in The Hague and was created in the deal that ended the Iran hostage crisis in 1981.

"I have a larger concern that in choosing to resolve this relatively minor bilateral dispute at this time, the Obama Administration is aggressively moving towards reestablishing diplomatic relations with Iran," Royce wrote. "Such action would clearly violate the President’s pledge to “remain vigilant” in countering the threat Iran poses to the United States and our allies in the region."

State Department spokesman John Kirby confirmed to Reuters that Royce's letter had been received.

"As with all Congressional correspondence, we'll respond as appropriate," Kirby said. Royce's letter gives Kerry until Feb. 17 to respond to his questions.

EXPERT OPINION

Joshua Tartakovsky

In July 2015, US Secretary of State John Kerry said that Iran was to gain $50 billion in frozen assets, and outright denied the figure was $150 billion.  Now it turns out that the US paid Iran $170 billion.  There are a few options here. Either Kerry was dishonest and lied about the real figures in his attempt to deflect massive criticism of the Iran deal, or facts on the ground changed- such as the taking hostage of American navy who infiltrated into Iranian waters – and this pushed Obama to expand the payment.

In any case, Obama’s argument that most of the money ($130 billion) was interest due to money owed to Iran seems unlikely [following the 1979 Revolution, the US refused to return to Iran money paid for the purchase of arms].  For one, surely the Obama administration knew about the accumulating interest long ago and Kerry insisted in July that the payment lies at $50 billion. Additionally, to the best of my knowledge, Iran did not announce an end to claims on this issue. Had a full interest finally been paid, any good businessman would demand an official statement that no further claims will be made, especially as the US claimed that the interest had to be paid now to avoid incurring costs.

Furthermore, the Commander of the Basij forces in Iran, Mohammad Reza Naqdi, said that “this money was returned for the freedom of the US spy and was not related to the [nuclear] negotiations.” He also said that the US “doesn’t understand anything but the language of force.”
 

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