Several top Republican lawmakers expressed outrage Wednesday as the Obama administration revealed how it flew planeloads of $1.7 billion in cash early this year to Iran as part of a deal to secure the Islamic republic’s release of four American prisoners.
“What on earth was the White House thinking?” said Rep. Edward R. Royce, California Republican and the chairman of the House Committee on Foreign Affairs.
“Sending the world’s leading state sponsor of terror pallets of untraceable cash isn’t just terrible policy,” Mr. Royce said in a statement Wednesday morning. “It’s incredibly reckless, and it only puts bigger targets on the backs of Americans.”
Obama administration officials had previously told lawmakers the $1.7 billion was transferred, but they had not disclosed that it was being sent as piles of cash to the Iranians.
Treasury Department spokeswoman Dawn Selak said in a statement late Tuesday that the cash was necessary because of the “effectiveness of U.S. and international sanctions.” Such sanctions have so isolated Iran from the international financial system that a traceable wire transfer was impossible.
The Associated Press said the $1.7 billion in cash was officially sent as the settlement of a decades-old arbitration claim between the U.S. and Iran, growing out of a deposit made by the pro-U.S. Shah of Iran on a weapons deal that was never consummated after the shah’s regime fell and was replaced by the current Islamic republic.
Obama administration officials had previously said a payment of $400 million of euros, Swiss francs and other foreign currency was delivered to Iran on pallets in mid-January — the same day Tehran agreed to release four American prisoners.
Initially, the White House told reporters and lawmakers that the payment was unrelated to the release of the prisoners, but more recently, administration officials acknowledged the cash was used as leverage until the American prisoners were allowed to leave Iran.
The remaining $1.3 billion, meanwhile, reportedly represented interest on that Iranian cash from the late-1970s weapons deal.
The administration had previously declined to say if the interest was delivered to Iran in physical cash, as with the principal, or via a more regular banking mechanism.
Earlier Tuesday, officials from the State, Justice and Treasury departments held a closed-door briefing for congressional staff on the payments, according to a Capitol Hill aide familiar with the session. The officials said the $1.3 billion was paid in cash on Jan. 22 and Feb. 5.
The money came from a little-known fund administered by the Treasury Department for settling litigation claims, according to the AP.
The so-called Judgment Fund is taxpayer money Congress has permanently approved in the event it’s needed, allowing the president to bypass direct congressional approval to make a settlement. The U.S. previously paid out $278 million in Iran-related claims by using the fund in 1991.
On Tuesday a group of Republican senators announced their support for legislation that would bar payments from the Judgment Fund to Iran until Tehran pays the nearly $55.6 billion that U.S. courts have judged that it owes to American victims of Iranian terrorism.
“President Obama’s disastrous nuclear deal with Iran was sweetened with an illicit ransom payment and billions of dollars for the world’s foremost state sponsor of terrorism,” said Sen. Marco Rubio, Florida Republican and the bill’s primary sponsor.