The State Department said the Obama administration acted with an "overabundance of caution" to safeguard the confidentiality of the intermediaries who helped transfer the cash.
WASHINGTON (Talk Media News) – The Obama administration acknowledged this week that the $1.7 billion payment to Iran to remedy a decades old financial dispute was made entirely in cash, causing a new wave of uproar among critics.
Treasury Department spokeswomen Dawn Selak confirmed to The Wall Street Journal Tuesday the remaining $1.3 billion owed, made over two payments after the first $400 million installment, needed to be made in cash because of the “effectiveness of U.S. and international sanctions regimes over the last several years in isolating Iran from the international financial system.”
The State Department said Wednesday that the cash nature of the payments was not immediately revealed to protect the privacy of the nations that assisted in the transactions.
“This was a complex deal, and we were limited in what we could say about it due to the fact that we had intermediaries acting on our behalf to help this interaction take place,” said State Department spokesman Mark Toner. “So the fact that we didn’t divulge all of the details, or just put some of the details out piecemeal speaks to that effort to safeguard the confidentiality of the intermediaries.”
Looking back, Tonor said the Obama administration acted with an “overabundance of caution with regard to the confidentiality of these financial transactions.”
When asked if the divulging the method of the payments jeopardizes that confidentiality, he said, “It doesn’t” and “certainly we’re acknowledging it now.”
Following a closed briefing of lawmakers on the payments Tuesday, a Congressional staff member who participated told WSJ that the $1.3 billion was transferred through Europe in two payments on Jan. 22 and Feb. 5.
The cash was reportedly transferred in the form of Swiss francs, euros and other currencies.
Sen. Tom Cotton (R-Ark.), a strong critic of Iran and Obama’s foreign policy, said that the “untraceable” money could serve as a slush fund for proxies of Iran — like the Lebanese militia Hezbollah, the Bashar al-Assad regime in Syria and Houthi militias in Yemen.
“It’s no wonder that the administration has fought so hard to keep the nature and timing of the cash transfers secret,” he said in a statement.
Other critical lawmakers have vowed to look into the payment now that they’ve returned from recess, including Sen. Mark Kirk (R-Ill.) who said that he intends to hold a hearing this month on how the funds are being used by Iran
Marco Rubio (R-Fla.) introduced legislation Tuesday to bar such payments to Iran in the future and reclaim the $1.7 billion the U.S. has paid, distributing it to victims of Iranian-backed terrorism. Rep. Ed Royce (R-Calif.) also introduced a bill that would prohibit cash payments to Iran.
The State Department has said that the initial $400 million payment to Iran was delayed for several hours “to retain maximum leverage” and ensure that three American prisoners were released the same day. It denied that the payment constituted “ransom,” as Republican presidential nominee Donald Trump and other powerful Republicans have alleged.
“Payments conditioned on the release of hostages are ransom payments, no matter what other dispute they are intended to settle,” Rubio said in an op-ed published Tuesday in the Tampa Bay Times.
The State Department announced the payment on Jan. 17, saying that it was part of a decades-long legal dispute surrounding compensation for an arms deal that was subsequently revoked after Mohammad Reza Shah Pahlavi was ousted from power during the Iranian Revolution in 1979.
The prisoner swap and airlifted cash payment carried out by the Obama administration were not secret, but their seemingly choreographed timing and that the payment was made in cash was pointed out in an August Wall Street Journal report, creating a new wind of criticism.