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October 23, 2016 / 21 Tishri, 5777

Posts Tagged ‘billion’

Senate May Block $1.15 Billion Arms Sale to Saudis

Wednesday, September 21st, 2016

The Senate on Wednesday will vote on a joint resolution blocking a $1.15 billion sale of as many as 153 tanks, hundreds of machine guns and additional military equipment to Saudi Arabia, over objections by Republican Senators Rand Paul and Mike Lee and Democratic Senators Chris Murphy and Al Franken to the Kingdom’s handling of the Yemen situation. Senators Paul and Murphy said they think the US needs to rethink its “automatic support” for the Saudis, Reuters reported.

State Department Spokeswoman Elizabeth Trudeau said on Tuesday that she was “very concerned” about reports of Saudi-led coalition warplanes bombing a potato factory in Yemen’s capital Sana, killing 14 people, mostly women. Trudeau would not say, however, whether the US is concerned that its weapons are being used to target civilians.

“We regularly talk to our partners and our allies around the world. You know, civilian casualties are obviously of grave concern to us,” she said.

Backers of the joint resolution told Reuters they want to block the sale of Abrams tanks and other equipment, noting that even if their measure did not pass, a strong Senate vote would send a strong message about US continued support for Saudi Arabia. Senator Murphy even said supporting the Saudi war against Yemen would damage US security.

“If we are helping to radicalize Yemenis against us, we are participating in the slaughter of civilians, and we are allowing extremist groups that have plans and plots against the United States to grow stronger, how can that be in our security interest?” Murphy asked, according to Reuters.


Netanyahu: US Never Offered Us More than $38 Billion

Sunday, September 18th, 2016

Prime Minister Benjamin Netanyahu on Sunday morning opened his weekly Cabinet meeting telling his cabinet ministers that despite reports to the contrary, the $38 billion military aid package Israel received from the Obama Administration for the next 10 years was the highest amount that had ever been suggested by the Americans.

“I hear all kinds of background noise and disinformation about the agreement,” Netanyahu said, noting, “I would like to make it clear: We were never offered more. We were not offered more money, not even one dollar, and we were never offered special technologies. These are distortions and fabrications by interested parties; either they do not have the facts or they are distorting the facts, and they are, of course, showing ingratitude, and in my view this is the saddest thing of all, ingratitude to our greatest and best friend, the United States.”

The reports that suggested Israel stood to receive as much as $45 billion over ten years came from opponents of Netanyahu, most notably prime minister wannabe Moshe Ya’alon, whom Netanyahu had removed from the defense ministry, and former Prime Minister and Defense Minister Ehud Barak, who served as Netanyahu’s defense minister before Ya’alon. The reports also suggested that Netanyahu’s refusal to accept the Iran nuclear deal, and the fact that he dared go behind President Obama’s back to speak directly to Congress against the deal, is what cost Israel the additional funds.

But Netanyahu denied all that, insisting “the support for Israel in the United States is stronger than ever. It crosses political parties and embraces the length and breadth of the United States and it finds expression in this agreement. This is the largest assistance agreement that the United States has ever provided to any country in its history, and this agreement proves the depth of the relationship, and the strength of relations, between Israel and the United States.”

In an earlier statement, last week, Netanyahu also stressed Israel’s strong ties with the US, saying the “agreement illustrates a simple truth: relations between Israel and the United States are strong and steadfast. This does not mean that we do not have disagreements from time to time, but these are disagreements within the family. They have no effect on the great friendship between Israel and the United States, a friendship that is expressed in this agreement, which will greatly assist us in continuing to build up Israel’s strength in the coming decade.”


Analysis: Obama $38 Billion MOU Designed to Shackle Congress, Fight Not Over

Thursday, September 15th, 2016

Late Wednesday night, Prime Minister Benjamin Netanyahu released a statement regarding the memorandum of understanding (MOU) with the US, saying: “In a short while, in Washington DC, a historic agreement will be signed between the United States and Israel. This agreement will ensure an unprecedented level of security assistance to Israel over the coming decade. This is the largest military assistance package that the United States has ever given to any country.”

A few lines down, Netanyahu wrote: “I would like to thank President Obama and his administration for this historic agreement,” and, “I also thank our many, many friends in the American Congress and among the American people for their great support, which crosses party lines and embraces the length and breadth of the United States.”

There, in the cross-section between the President and Congress, is where the drama over the US aid package to Israel will be taking place in the coming months. It also explains why the PM has embraced a deal that is, clearly, a step back in terms of Israel’s ambitions for US military aid.

According to Ha’aretz, citing senior defense ministry officials, as recently as last July US Secretary of Defense Ashton Carter and then Defense Minster Moshe Ya’alon have reached an agreement in principle on a $45 billion aid package over ten years. Why is Israel now willing to settle for $7 billion less? Ha’aretz, typically, blames the cut on Netanyahu’s refusal to toe the line on the Iran nuclear deal, and his insolent battle against the President in Congress over it. But that doesn’t explain why Sec. Carter was offering the larger amount months after Netanyahu’s March 3, 2015 speech in Congress.

Like all deals, the $38 billion MOU must still be confirmed in the Senate, first by the Appropriations Committee and then by the full Senate. One key member of the committee is Senator Lindsey Graham (R – SC), who earlier this week told the Washington Post: “The Israeli prime minister told me the administration is refusing to sign the MOU until I agree to change my appropriation markup back to $3.1 billion. I said, ‘Tell the administration to go [expletive] themselves.’”

The 10-year aid package reaching its conclusion in 2017 was set at “only” $31 billion, but, in addition, Congress has been awarding Israel additional funds: $729 million in 2014 to help with the acquisition gaps caused by the Gaza War, as well as to help the development of the Iron Dome system. In 2015 Congress gave Israel $620 million in addition to the aid package, and this year the estimates are around $600 million. So that the aid Israel currently receives from the US is pretty close to the MOU’s $38 Billion. Israel will only benefit from an additional $100 million annually. For a country boasting a $300 billion annual GDP, this is the definition of chump change.

Why, then, did Netanyahu agree to an MOU that compels Israel to pay back whatever amount Congress adds in military aid, which would include an attempt by, say, Senator Lindsey Graham, to tack on an extra $7 billion to the proposed package?

“I’m offended that the administration would try to take over the appropriations process. If they don’t like what I’m doing, they can veto the bill,” Graham told the Post. “We can’t have the executive branch dictating what the legislative branch will do for a decade based on an agreement we are not a party to.”

The MOU awards the Israeli missile defense development effort $500 million per year, more than the $487 million Congress gave it in 2016, but less than the Senate appropriations bill for 2017, which gives Israel $600 million. By the way, Obama asked for only $145.8 million in the budget. So, should the MOU go through the Senate, Israel would lose $600 million right off the bat. And Israel signed a letter, as part of the MOU, that any amount tacked on to the aid package in later years, Israel would be obligated to give back.

A White House official said this is better for Israel, since “the fact that under our offer Israel can count on the administration’s commitment to provide a substantial level of missiledefense assistance for a 10-year period is substantively different from the missile- defense support it has received in previous years.” There’s some truth to it — rather than go lobbying every year for that money, Israel is guaranteed a moderately lower sum, it’s already in the bank.

“You know the White House pressured them into writing that letter,” Graham said. “It is a level of antagonism against Israel that I can’t understand.”

Graham is irate because the MOU was a White House attempt to neutralize the Republican Congress’s ability to forge an independent relationship with the Jewish State. They can continue to invite Bibi to talk to them against the next president, if they so wish, but they can’t give him a penny. Vindictive? Probably. But also understandable. This President spent much of his two terms in office fighting Congress over foreign policy. He’d like to leave his successor a cleaner slate, at least when it comes to dealing with Israel.

The MOU is also better for the Pentagon, which, together with the White House, can keep all the money going to Israel inside one, manageable package. Should the need arise for additional funds, Israel would have to go to the President, not Congress, and when Israel asks for something, Israel also has to give something. Also, in six years, according to the MOU, Israel will lose the right to spend any of the aid package on its own military industrial complex — all the money must stay in the US. Of course, by then Israeli manufacturers would follow Elbit and Rafael and forge partnerships with US corporations, but the jobs in Israel would be lost.

“I’m not pleased with a provision in the MOU which prohibits Israel from using American defense assistance on Israeli defense suppliers,” Senator Graham wrote on his website. “Israel’s homegrown defense technology is some of the best in the world.” He added, “Under our old agreement Israel was allowed to develop cutting-edge military technology and was required to share this technology with the United States. I’m proud to say that many of these advancements helped protect the lives of American service members in uniform. I do not believe this new provision will serve the interests of the United States or Israel. I do fear it will be Americans wearing the uniform of our nation who will pay the price for this short-sighted change in policy.”

So, it’s obvious why the MOU represents a good deal for the Administration. But why was Netanyahu “duped” into signing the MOU? There are two possible explanations, and they both have to do with the coming lame duck session of Congress. Since last summer, there have been persistent rumors in Jerusalem and Washington that, once the November 8 election is over, the Obama Administration would spend its last breath on squeezing a 2-state deal out of Israel. To do that, the rumors went, Obama would join the majority in the UN Security Council to pass resolutions that push Israel against the wall. It would be ugly, it would be painful, there would be no support for the move from either the Democrats nor the Republicans, but it won’t matter. It would be a move that can’t be stopped by Congress, and Israel would, at last, bow to the pressure.

Did Netanyahu sign the MOU in return for an Obama promise to leave him alone between Nov. 9 and January 17? Perhaps. Of course, the above nightmare scenario is not something we would expect from any US president, except for the fact that President Obama has been so capricious and unpredictable about his bizarre “Arab Spring” campaign, that if anyone would dream up something like that it would be him.

The other point has to do with the conversation Netanyahu had with Senator Graham earlier this week, in which, we understand, Graham did most of the talking, and only part of it was taken up by expletives. The Senator from South Carolina, with Bibi’s blessing, can bury the MOU. He has at his disposal several parliamentary means of delaying it until after the start of the new year. It won’t be simple, and there are members on the Democratic side of the Appropriations Committee who are decidedly not friendly to Israel (Senator Patrick Leahy, Dem – Vt comes to mind) who would attack Graham viciously. But if Graham can drag this deal long enough, he could get it tossed and rewritten by the next Administration.


Claim: Administration Secretly Transferred $1.7 Billion To Iran To Keep It Out Of Terror Victims’ Hands

Wednesday, September 14th, 2016

Shurat HaDin-Israel Law Center – which represents American families of terror victims who have won U.S. court judgments against Iran for its support of terrorist attacks in Israel – alleged this week that the Obama administration kept secret the details of large cash payments made to Tehran in order to evade efforts by its clients to recover those funds to satisfy outstanding court awards.

A letter to Congress from attorneys Nitsana Darshan-Leitner of Tel Aviv and Robert Tolchin of New York recalled that President Obama on January 17 announced the settlement of a legal dispute between the United States and Iran over $400 million held by the U.S. in a Foreign Military Sales (FMS) program account since 1979.

The administration agreed to pay the $400 million it conceded it owed Iran, plus payment of an additional $1.3 million in interest on that amount.

In recent weeks, the $1.7 billion, which was secretly paid out in cash, has come under scrutiny because the timing and circumstances of the payments appeared to confirm the Iranian claim that the White House agreed to pay the money as ransom to Tehran for the release of American hostages.

However, in light of revelations during a Sept. 8 Congressional subcommittee hearing, Shurat HaDin is asserting “it is now clear the administration has deliberately kept numerous payments to Iran secret in order to shield Iran from having to forfeit those funds to pay terror victims amounts Iran owes under outstanding U.S. judgments.”

Shurat HaDin says that under legislation passed in 2000, the U.S. was legally entitled to apply the $400 million in the FSM account to satisfy terror victims’ judgments, eliminating the $400 million balance and nearly 16 years of interest claimed by Iran.

The Shurat HaDin letter cites the “suspicious revelation” at the Congressional subcommittee hearing that the United States and Iran did not draft a written settlement agreement or any other formal documentation of the cash transfers, and that “Iran specifically directed the Iran-U.S. Tribunal at The Hague, where the claim was to be resolved through arbitration, that it not record the settlement of the claim for the parties.”

Shurat HaDin’s Darshan-Leitner said in a statement: “We believe that the secrecy in which these cash payments were made was part of an effort by the White House to conceal these payments from the terror victims and to hide the fact that it was effectively canceling Iran’s debt for its terror-related activity. This is a horrible fraud against the terror victims.

“It appears the secret cash transfers were specifically done as an end-run around the ability of the families to attach the money and enforce their federal court judgments. Instead, the administration went to great lengths to ensure that the $1.7 billion payment was shrouded in secrecy, never reduced to writing nor even recorded with The Hague, and was paid to Iran in cash as quickly and directly as possible.”

Shurat HaDin urged Congress “to take action to guarantee that further payments to Iran are not made as long as Tehran remains a state sponsor of terrorism and a threat to its neighbors “and until it has paid every judgment it owes to American victims of terror.”


(JNi.Media, Jewish Press staff)

Combined News Services

Netanyahu Representative in DC to Negotiate $38 Billion Aid Deal

Tuesday, September 13th, 2016

Brigadier General Yaakov Nagel, Israel’s acting National Security Council, arrived in Washington DC on Tuesday to meet with President Obama’s National Security Advisor Susan Rice, in preparations for signing a new US military aid package. The new US aid deal, which the two governments have been negotiating since November 2015, awards Israel $38 billion over 10 years.

Nagel met with US Ambassador to Israel Dan Shapiro to work out the final details before leaving for Washington — including the text of the official announcements. The new aid package is expected to average $3.8 billion a year, a considerable cut from Netanyahu’s initial request for $4.5 billion. The deal is also contingent on Israel agreeing not to approach Congress for additional funds, as in the case of the Iron Dome missile defense system, which Congress has been paying for outside the annual aid package. Now an estimated $5 billion out of the package will be spent over 10 years on missile defense development.

In other words, the new aid package is only adding $300 million to the previous amount. To remind you, the sum of $3 billion annually was set during the Camp David peace negotiations with Egypt, as compensation to Israel for giving up the Sinai peninsula as a military asset. That amount has never been raised in close to 40 years, even though the current value of that annual package would have been $10.48 billion.

The critical disagreement between the two sides over the current deal has been whether or not Israel could continue to invest a percentage of the aid package in Israeli made military products. The Obama Administration wanted the entire amount to stay in US corporations, which would have been devastating to Israeli manufacturers and to the IDF. A short episode during the 2014 Gaza War, in which the Obama Administration stopped shipping to Israel all defense items, including Hellfire missiles, served as a memorable lesson to the Israeli security apparatus about the need to increase its self-reliance.

The new deal ended up adding six years in which Israel can continue to spend as much as 26% of the US aid money on Israeli made products, as well as another 13% for fuel purchases. By the seventh year, or halfway into Clinton’s or Trump’s second term, the Israeli military industrial complex would have to quit US aid cold turkey — Unless Netanyahu or his successor is able to renegotiate that part — depending on who is in the White House and who controls Congress at the time.

David Israel

Shurat HaDin: Obama Secretly Transferred $1.7 Billion to Iran to Keep It Out of Terror Victims’ Reach

Tuesday, September 13th, 2016

Shurat HaDin-Israel Law Center, representing American the families of terror victims who have won US court judgments against the government of Iran for its support of Palestinian terrorist attacks in Israel, on Tuesday released a letter it sent US Congress members alleging that the Obama Administration kept secret the details of the $1.7 billion in cash payments to Tehran in January 2016 in order to evade efforts by their clients to recover those funds to satisfy outstanding court awards.

In the past, American terror victims have been successful in seizing Iranian bank accounts when those had been located.

The letter, sent by attorneys Nitsana Darshan-Leitner of Tel-Aviv and Robert Tolchin of New York, recalls that on January 17, 2016, President Obama announced the settlement of a legal dispute between the United States and Iran over $400 million held by the US in a Foreign Military Sales (“FMS”) program account since 1979. The Obama Administration agreed to pay the $400 million it finally conceded it owed Iran, plus payment of an additional $1.3 million in interest on that amount.

Then, “in recent weeks, the $1.7 billion which was secretly paid out in cash has come under severe scrutiny because the timing and circumstances of the payments appear to confirm the Iranian claim that the White House agreed to pay the money as ransom to Tehran for the release of American hostages.”

However, in light of the recent revelations in a Congressional subcommittee hearing held on Thursday, September 8, 2016, Shurat HaDin is asserting that “it is now clear that the Administration has deliberately kept numerous payments to Iran secret in order to shield Iran from having to forfeit those funds to pay terror victims amounts Iran owes under outstanding US judgments.”

The Shurat HaDin letter cites a “suspicious revelation at the Congressional subcommittee hearing that the United States and Iran did not draft a written settlement agreement or any other formal documentation of the cash transfers, and that Iran specifically directed the Iran-US Tribunal at the Hague, where the claim was to be resolved through arbitration, that it should not record the settlement of the claim for the parties.”

Shurat HaDin asserts that under a legislation passed in 2000, the US was legally entitled to apply the $400 million in the FSM account to satisfy terror victims’ judgments, and this way eliminating the $400 million balance and nearly 16 years of interest claimed by Iran.

Shurat HaDin President Nitsana Darshan-Leitner said in a statement: “We believe that the secrecy in which these cash payments were made was part of an effort by the White House to conceal these payments from the terror victims and to hide the fact that it was effectively canceling Iran’s debt for its terror-related activity. This is a horrible fraud against the terror victims. It appears the secret cash transfers were specifically done as an end run around the ability of the families to attach the money and enforce their federal court judgments.”

Why didn’t the Treasury ever tell the families they were holding these funds?” Darshan-Leitner demanded to know.

Had either the settlement or an award against the United States at the Iran-US Tribunal been entered on the books, and Iran had sought to have the settlement or award confirmed in US court, then terror-victims with judgments against Iran could have legally “attached” any judgment affirming the settlement or award, so that the amount could be applied to satisfy their terror-compensation judgments, Shurat HaDin contends, explaining that “instead, the Administration went to great lengths to ensure that the $1.7 billion purported settlement was shrouded in secrecy, was never reduced to writing or even recorded with the Tribunal in Hague, and was paid to Iran in cash as quickly and directly as possible in order to head off any chance that Iran would be forced to forfeit any amount to pay legal judgments it owes to American terror victims.”

Shurat HaDin urged Congress to continue to investigate these issues, and to take action to guarantee that further payments to Iran do not take place as long as Iran remains a state sponsor of terrorism and a threat to its neighbors, “and until it has paid every judgment it owes to American victims of terror.”

Nitsana Darshan-Leitner addressed her letter to Senator Marco Rubio and Representatives Mike Pompeo and Ed Royce, who have each introduced legislation in response to the $1.7 billion payment to Iran, and to House Financial Services Committee Chairman Jeb Hensarling and Oversight and Investigations Subcommittee Chairman Sean P. Duffy, whose subcommittee held a special hearing on the $1.7 billion payments last Thursday, September 8, 2016.


Has US Laundered $33 billion in Cash Deliveries to Iran since January 2014?

Monday, September 12th, 2016

{Originally posted to the Liberty Unyielding website}

Americans were startled to discover, at the beginning of August, that the release of frozen funds to Iran in January 2016, at the same time as a prisoner exchange, had been accomplished by money-laundering cash.

At the time, the public was told that $400 million of the $1.7 billion frozen-funds settlement had been paid out with pallets of cash, converted into foreign currencies and literally flown into Iran on an unmarked Iranian plane from Switzerland.

That was unsavory enough: running a “prisoner exchange” with Iran like a cartel drug deal.

Obama, naturally, mocked his critics for being upset about it:

Obama explained that pallets of cash were used in the exchange because the United States doesn’t have a banking relationship with Iran.

“[W]e couldn’t send them a check, and we could not wire the money,” he said during a press conference at the Pentagon today.

He insisted that the administration was transparent about the payments to Iran, even though the knowledge about the manner of the payment was not previously disclosed. But Obama mocked the notion that the new details made any difference.

“It is not at all clear to me why it is that cash, as opposed to a check or a wire transfer has made this into a new story,” he said. “Maybe because it kind of feels like some kind of spy novel or you know, some you know, crime novel because cash was exchanged.”

Earlier this week, the public learned that the entire $1.7 billion had been transferred to Iran by the same method, on 17 and 22 January and 5 February.  Instead of one cartel drug-deal drop, there were three.

A Treasury Department official offered this delightfully spun perspective:

The Treasury Department confirmed late Tuesday that the subsequent payments were also made in cash.

“The form of those principal and interest payments—made in non-U.S. currency, in cash—was necessitated by the effectiveness of U.S. and international sanctions regimes over the last several years in isolating Iran from the international financial system,” Treasury spokeswoman Dawn Selak said.

So, basically, we had isolated Iran so effectively that the only way for the U.S. government to do business with Iran was to make like “El Chapo” Guzman.

Reportedly, the cash deliveries were accomplished with the collusion of the central banks of Switzerland and the Netherlands.  Those banks would most likely have obtained at least some of the cash from big commercial banks.

If the foreign countries and/or banks did this on their own, they’d be in violation of the remaining, unlifted U.S. sanctions on Iran for terrorism sponsorship.  Our terrorism sanctions on Iran are separate from the nuclear-related sanctions.  And cash is untraceable, in terms of how Iran goes on to spend it.  The Iranians could well use any euro or other foreign note they get to buy more terrorism.  (They could use it for other dangerous things too, but it would very specifically violate the sanctions we are still supposedly enforcing, if the cash were used to pay for terror-related activities.)

The U.S. government could thus, under our law, go after the financial interests these foreign entities have in the United States, prosecuting them and potentially imposing fines or even jail time, especially for any Americans involved.  We could prohibit our businesses from doing business with them, as we have done numerous times in recent decades.

But the implication here is that, since it’s the U.S. government doing the cash-laundering, everything’s OK.

That does raise the question why – if it was so OK – Obama didn’t just explain to Congress and the American people that things were being done this way.  If this is all just fine because the government is doing it (and there are times it could be; see below), why all the coy secrecy?

But when did this start?

It now appears that that question will be overshadowed by the next one.  How long has the Obama administration been laundering cash to deliver to Iran, and how much has been processed that way?

The question has been raised in Congress this week, after the revelation that the entire $1.7 billion was paid to Iran in laundered cash.  Since January 2014, Iran has been allowed to receive $700 million per month in payment settlements for foreign oil and gas sales, under the terms of the initial “Joint Plan of Action” (JPA) agreed to in November 2013, as an interim step in the nuclear negotiations.  (The cash deliveries in January 2016 came with implementation of the more recent JCPOA, concluded in July 2015.)

Throughout that time, the terrorism sanctions on Iran have remained in place.  That means it has been illegal to transfer cash by any means to prohibited entities in Iran, including the banks.  It still is illegal, even though Obama has done it on three known occasions now.

Since transferring that $700 million a month in cash to Iranian banks would have been illegal under U.S. law, Congress wants to know how it was done.  And keep in mind, the Obama administration (a) hasn’t explained that, and (b) has so far demonstrated only the model of laundered-cash deliveries as a method.

Mark Dubowitz of the Foundation for Defense of Democracies framed the question for Congress in testimony to the House Financial Services Committee this week.  (His formal statement is here.)

Lawmakers and others are now pressing the administration to disclose how a slew of other payments to Iran were made in the years leading up to the final nuclear accord.

“In July, the Associated Press cited U.S. officials who estimated that Iran ‘brought home less than $20 billion.’ [I.e., from the earlier monthly payments allowed under the JPA, along with access to some other funds authorized by the 2013 agreement. – J.E.] Were these funds repatriated to Tehran in cash or in gold and precious metals? Through the formal financial system? Or through some combination?” Dubowitz asked in his testimony before the House Financial Services Committee.

“The administration should also clarify if the $20 billion dollars is inclusive of the $11.9 billion in [Joint Plan of Action] funds, or if the $20 billion was in addition to the $11.9 billion,” he said. “Either way, it is important to understand how funds were sent. The worst-case scenario here is that Iran may have received as much as $33.6 billion in cash or in gold and other precious metals.”

Dubowitz’s points alone highlight how vague the Obama administration has been about the whole situation.  We literally don’t know if the total amount was $20 billion, or if it was over 50% more than that.  We don’t know how much was in readily spendable cash, and could have gone into things like arming Hamas to attack Israel in 2014, arming the Houthi insurgency in Yemen, attacking U.S.-backed forces in Syria, and funding the S-300 air defense system and Iran’s own weapons development efforts.

Plus – bonus! – we don’t know if the administration has been complicit in laundering the monthly payments in a manner similar to the drug-deal drops in 2016.  From Adam Kredo at WFB again:

The cash payment of $1.7 billion earlier this year was the easiest way to ensure Iran got immediate access to the money, according to [Obama administration] officials.

“Iran had to have it in cash,” Paul Ahern, assistant general counsel for enforcement and intelligence at the Treasury Department, told lawmakers. “Iran was very aware of the difficulties it would face in accessing and using the funds if they were in any other form than cash, even after the lifting of sanctions.”

A cash delivery “was the most reliable way that they received the funds in a timely manner and it was the manner preferred by the relative foreign banks,” Ahren said.

Given the situation, it is likely that the multiple past payments to Iran were conducted in a similar fashion, according to Dubowitz.

The alternatives we had

(1) In political, or policy, terms, the obvious alternative to just paying out $700 million a month to the Iranians starting in January 2014 was to make payments contingent on performance.  The same applies to the $1.7 billion laundered separately in 2016.  The terrorism sanctions have never been lifted.  If we weren’t going to lift them, then compliance with their terms should have been demanded before those funds transfers were made to Iran.

Yes, that almost certainly would have meant either a substantially different agreement in November 2013, or no agreement at all.   But since Iran basically ignored the 2013 JPA and continued to advance her nuclear weapons capability throughout the period November 2013-July 2015, it would be highly misleading to suggest that we’d have lost much that way.  (See here, here, here, and here for starters.)

(2) In terms of mere instrumentality, Mark Dubowitz points out, meanwhile – and several congressmen noted they were fully aware – that a mechanism exists already under U.S. law for transferring funds to Iran for limited purposes, including, specifically, the payment of claims under the Iran-U.S. Claims Tribunal.  The $1.7 billion was paid under those auspices, since it related to a longstanding Iranian claim from before 1979.

The Obama administration has argued that it had no means other than pallets of cash to make the $1.7 billion in payments.  But Dubowitz believes otherwise (FDD research memo, Sep 2016, p. 5):

The administration’s argument is undercut by the sanctions regulations it supposedly relies upon. Individuals and entities (including U.S. and foreign banks) involved in facilitating these transfers are likely not exposed to sanctions-violation risks because all transactions necessary for settling claims under the Iran-United States Claims Tribunal are permitted according to the Iranian Transactions and Sanctions Regulations.  In fact, this license allows direct transactions between the U.S. and Iranian financial systems for the purposes of Claims Tribunal settlements. Under this provision, Washington did not need to transfer the funds to Iran via a foreign bank, nor did the funds need to be transferred in cash. Washington can legally execute the payment without needing to circumvent the sanctions architecture, as administration officials implied was necessary.

And there’s more, directly from Dubowitz’s testimony (p. 4).

Even in the absence of this explicit license in the Iranian Transactions and Sanctions Regulations, the president has authority under the International Emergency Economic Powers Act to authorize banks to facilitate these transactions. Indeed, nearly 3,000 special licenses are granted every year for sales of food, medicine, and other humanitarian-related goods into Iran. Thus, the transfer of funds in cash on pallets to Iran was legally unnecessary. In fact, as the Associated Press reports, there is no precedent for the transfer of such a large quantity of cash in modern American history.

Using this authority openly could actually have been an exact fit for waiving the $700 million monthly settlements under the JPA.  Foreign banks could have handled the transactions without fear of triggering a U.S. Treasury response.

And yet still there’s more, on page 5.

There is, however, a clear precedent for using the formal financial system to transfer money pursuant to claims after the 1979 Iranian revolution. One example is the resolution of the case surrounding the accidentally downed Iran Air Flight 655 in July 1988.  According to the Associated Press, although it ultimately took until 1996 for the U.S. to reach a settlement with Iran, “$61 million was deposited in a Swiss bank account that was jointly held by the New York Federal Reserve and the Iranian Central Bank.” Why was the $1.7-billion settlement different from previous Tribunal-related payments?

Why didn’t Obama use one of these above-board approaches to handling funds transfers to Iran?

What a question that is.

At this point, it’s worth mentioning the additional revelation from last week that a series of secret exemptions given to Iran has basically nullified much of her compliance with the JCPOA.  For nearly three years now, the U.S.-led West has been acting as an ATM for cash withdrawals by Iran.  Yet the goal Obama touted in his political sale of the JCPOA to America in 2015 – that his “deal” would lengthen Iran’s breakout time to a year, throughout the life of the agreement – has been invalidated by those secret exemptions.  At the most conservative estimate, the breakout time at this point would be as little as five months, if Iran pulled out of the “deal” today.  (Iran frequently threatens to do that.)

It could be less.  The longer this goes on, the less sense it makes to treat this whole sequence of events as “a deal on Iran’s nuclear program.”  That’s just not really what it is.


J. E. Dyer

Printed from: http://www.jewishpress.com/indepth/analysis/j-e-dyer/has-us-laundered-33-billion-in-cash-deliveries-to-iran-since-january-2014/2016/09/12/

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