The Obama administration has acknowledged that the $1.7 billion transition made to Iran this past January was made entirely in cash.
In a statement made on Tuesday, Treasury Department spokeswoman Dawn Selak explained that the cash payments were necessary because of the “effectiveness of U.S. and international sanctions,” which isolated Iran from the international finance system.
The $1.7 billion was the settlement of a decades-old arbitration claim between the U.S. and Iran, existing from the Islamic Revolution of 1979 that toppled the Shah.
An initial $400 million of euros, Swiss francs and other foreign currency was delivered on wooden pallets January 17, which also happened to be the day Tehran agreed to release four American prisoners.
When the nuclear deal was implemented in January, the Obama administration announced that it had agreed to pay $1.7 billion to settle the old dispute, although officials didn’t clarify when or how the payments were made until now.
The money came from the little-known Judgment Fund, administered by the Treasury Department for settling litigation claims. The fund contains taxpayer money that Congress has permanently approved in the event that it’s needed, allowing the president to bypass direct congressional approval to make a settlement.
Republicans have accused the administration of paying ransoms, a claim to which Obama responded, “We do not pay ransom…We didn’t here, and we won’t in the future.”
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 is owed to American victims of Iranian terrorism.
The bill’s primary sponsor, Senator Marco Rubio of Florida stated, “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.”
Both the House and Senate plan to hold hearings on the payments and House Foreign Affairs Committee Chairman Ed Royce introduced a measure to censure the Obama administration for the payments this past Tuesday.
