Obama Administration Accused of Lying About Attempted Money Transfer to Iran

June 7, 2018 7:59 pm Last Updated: June 8, 2018 8:39 pm

A Senate report has charged that the Obama administration secretly tried to give Iran access to the U.S. financial system, violated U.S. law in doing so, and then lied to Congress and the American people about the matter. It says the Obama administration acted to help the Iranians out of a belief that they were bound by the terms of the nuclear deal with Iran, formally known as the Joint Comprehensive Plan of Action (JCPOA).

The Senate report concentrates on efforts by the U.S. Treasury Department to aid Iran in transferring $5.7 billion in assets out of an Omani bank to Iran. To facilitate this transfer, the Treasury in February 2016 issued a specific license to Iran allowing these transactions.

Two U.S. banks contacted by the Treasury refused to take part in the transfer, citing concerns that they would fall afoul of U.S. law and also out of fear their reputations would suffer for aiding the Iran regime in this way.

The Treasury and State departments then worked fruitlessly to try to find other means of helping the Iranians move the funds, including asking the Central Bank of Germany for assistance.

The report suggests the Iranians eventually moved their money in small increments through European banks, in a process much less convenient than working through the U.S. financial system would have been.

The report was issued on June 6 by the Permanent Subcommittee on Investigations, chaired by Rob Portman (R-Ohio), part of the Committee on Homeland Security and Governmental Affairs.

Misrepresentations

In a statement to Fox News, Portman said, “The Obama administration, during the negotiations of the Iran deal, misled the American people. And I think they did so because they were desperate to get a deal.”

The report catalogs how the American people were misled.

The negotiations for the JCPOA concluded in July 2015. Around that time, administration officials gave assurances, in testimony before Congress, that under the deal Iran would not be given access to the U.S. financial system.

The report quotes Treasury Secretary Jack Lew as testifying that under the JCPOA “[Iran] will continue to be denied access to the [U.S.] financial and commercial market.”

Reports of the actions of the administration trying to move the Iranian money out of the Omani bank reached some members of Congress in March, after the Treasury had issued its special license in February authorizing access to U.S. banks, and senators Marc Rubio (R-Fla.) and Mark Kirk (R-Ill.) asked for clarification.

The Treasury responded, “The administration has not been and is not planning to grant Iran access to the U.S. financial system.”

Legalities

President Donald Trump, on learning of the Senate report, wrote in a June 7 tweet: “The Obama Administration is now accused of trying to give Iran secret access to the financial system of the United States. This is totally illegal. Perhaps we could get the 13 Angry Democrats to divert some of their energy to this “matter” (as Comey would call it). Investigate!”

Former Obama administration officials have argued that the terms of the JCPOA left them no choice but to try to satisfy the Iranian request for help in moving their money out of Oman.

The report quotes one Treasury official as saying in an email: “Yikes. It looks like we committed to a whole lot beyond just allowing the immobilized funds to settle out.”

There are two problems with the claim that the JCPOA required the United States to help the Iranians with the money transfer. The report says that in March 2016, a senior State Department official told an Iranian counterpart that the money transfer was “prohibited by U.S. sanctions that are still in place, and which we were clear we would not be removing as part of the JCPOA.” And so, at the time, the transaction was regarded as illegal.

More fundamentally, it is not clear that the JCPOA has any legal authority. In November 2015, the State Department wrote in a letter, “The Joint Comprehensive Plan of Action (JCPOA) is not a treaty or an executive agreement, and is not a signed document.”