The Obama administration wired money to Iran on two separate occasions in the past 14 months, undercutting claims that it delivered a $400 million payment to the Islamic Republic in cash because it was strict in enforcing sanctions, Politico reported on Saturday.
The U.S. government wired about $848,000 to Iran in July 2015 in order to settle a dispute over fossils and architectural drawings that are now in Iranian possession, a spokesman from the Treasury Department said. This April, the U.S. also wired roughly $9 million to Iran in exchange for 32 tons of its excess heavy water, which could be used to make a plutonium bomb.
The spokesman’s confirmation contradicted President Barack Obama’s stated impetus for sending Iran $400 million in cash on January 16, the same day that Iran released four American hostages. In an August 4 press conference, Obama said, “the reason that we had to give them cash is precisely because we are so strict in maintaining sanctions and we do not have a banking relationship with Iran that we couldn’t send them a check and we could not wire the money.”
However, the Treasury spokesman acknowledged to Politico that the U.S. had wired money to Iran within the last 14 months. Mark Dubowitz, the executive director of the Foundation for Defense of Democracies, raised the possibility during congressional testimony (.pdf) earlier this month that the $848,000 payment was wired to Iran, while The Weekly Standard reported on Friday that payment for the April purchase of Iran’s heavy water was made via wire transfer.
The spokesman told Politico that the payment for the heavy water was permitted because Iran had gained “incremental” access to the world banking system, but didn’t explain how the July 2015 payment was made while full American sanctions were in place.
A senior Obama administration official denied that the Treasury’s acknowledgement of the wire transfers to Iran undercut the president’s explanation, saying that “we do not have a direct banking relationship with Iran, which means that we cannot wire money directly to Iran.” The official didn’t specifically comment on the July 2015 or April 2016 wire transfers, Politico observed.
The Obama administration’s decision to send the $400 million cash payment to Iran on the same day that it released four American hostages prompted critics to characterize it as a ransom. The $400 million payment was made despite concerns expressed by senior Justice Department officials that it would appear to be a ransom.
Brig. Gen. Mohammad Reza Naqdi, commander of Iran’s Basij militia, said in January that the $400 million payment “was returned for the freedom of the US spy and it was not related to the [nuclear] negotiations.”
According to Iranian media reports, the $400 million payment, as well as an accompanying $1.3 billion transfer to cover interest on the principal, has been earmarked to help boost Iran’s military spending by 90 percent next year.
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