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The Truth about the $1.7 billion settlement with Iran


Update: Since we originally posted this, numerous Republicans, including Presidential nominee Donald Trump, have continued to promote the false narrative that this settlement was somehow a ‘ransom’ payment. While Iran deal opponents are desperate to talk about anything other than the continued success of the JCPOA, we cannot let them turn what was a welcome settlement of a decades old financial dispute into something nefarious. 

Opponents of the historic nuclear agreement with Iran are at it again, desperate to talk about anything other than the fact the Joint Comprehensive Plan of Action (JCPOA) is working. Just over one year after the deal was reached, every potential pathway to a nuclear weapon remains blocked, Iran’s enriched uranium stockpile has been reduced by 98%, and inspectors are on the ground in Iran with unprecedented access.

Confronted with the simple reality that the JCPOA is doing exactly what it was supposed to do, anti-diplomacy forces are left grasping at straws, desperate to manufacture crises and scary headlines whenever they can. Their latest effort at misinformation and distraction comes from the Wall Street Journal who reported on August 3 that the Obama administration sent $400 million in cash to Iran at the same time the Iranians released four Americans from prison, suggesting that the payment amounted to “ransom.”

Opponents of the Iran deal are amplifying this story in a frantic attempt to portray the Obama White House as kowtowing to Iran. The WSJ reported that the payment represented the first installment of around $1.7 billion the Obama administration agreed to pay to settle a decades-old dispute over an arms deal signed before the Iranian revolution in 1979.

A simple review of the facts shows just how desperate anti-diplomacy forces promoting this story have become.

The Wall Street Journal Story Is Not News. President Obama announced this agreement on January 17, 2016, noting that it “could save us billions of dollars that could have been pursued by Iran. So there was no benefit to the United States in dragging this out.” [White House; 1/17/16]

Numerous Media Outlets, Including the WSJ, Reported On Obama’s Announcement at the Time. CNN reported that Iran had set up a $400 million trust fund for arms purchases prior to Iran’s 1979 revolution and that the U.S. is “returning the money in the fund along with ‘a roughly $1.3 billion compromise on the interest,’” according to the State Department.

The New York Times similarly reported: “Mr. Obama also announced the resolution of another argument between Tehran and Washington that dates to the Iranian revolution, this one over $400 million in payments for military equipment that the United States sold to the shah of Iran and never delivered when he was overthrown.”

The Wall Street Journal itself framed the story as “ransom” back in January. [CNN, 1/17/16; NYT, 1/17/16, WSJ 1/21/16]

The U.S.-Iran Arms Deal Settlement Probably Saved U.S. Taxpayer Dollars. Secretary of State John Kerry said at the time that because of the settlement, Iran is unable to pursue a bigger award against the U.S. at the Iran-U.S. Claims Tribunal in The Hague. Iran was seeking up to $10 billion. [State Department 1/17/16; LobeLog 6/10/16; WSJ, 8/3/16]

The U.S. Sent Iran Cash Because Of Iran’s Limited Access to the International Banking System. According to a U.S. official: “Sometimes the Iranians want cash because it’s so hard for them to access things in the international financial system. They know it can take months just to figure out how to wire money from one place to another.” The U.S. wired $400 million to central banks in Switzerland and the Netherlands. It was then converted into foreign currencies and shipped to Iran. [WSJ, 8/3/16]

The Cash Payment Had Nothing To Do With Prisoner Releases. Iran would have received the cash payment regardless of the prisoner release. State Department spokesman John Kirby noted that the arms deal settlement was “completely separate” from the talks to free Americans jailed in Iran. U.S. officials acknowledge the payment delivery was timed with the prisoner release only to provide the appearance that Iran “had gained something tangible” in return. [WSJ 8/3/16]

This Is The Latest Faux-Scandal Hyped By Hawks Seeking To Undermine The Iran Nuclear Deal And Warmer Relations With Iran. Iran deal opponents, neoconservatives, and their allies will grasp at any story they believe undercuts President Obama’s diplomatic overtures to Iran – whether they’re baseless articles about Iran “self-inspecting” its nuclear program, or false reports that the French wanted Congress to kill the Iran deal. But after all the hype, the facts remain that diplomacy has succeeded in blocking Iran from building a nuclear weapon. [Bloomberg View, 7/30/15; Win Without War, 7/31/15; AP, 8/19/15; Vox, 8/20/16]

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