GOP Lawmaker Wants Biden Admin To Explain Why It Granted Iran $10 Billion in Frozen Funds

Cash will enable Tehran to 'support more violence against Israel, the U.S., and our allies,' Steil says

Rep. Bryan Steil, R., Wis. (Getty Images)
November 22, 2023

A Republican lawmaker is seeking information on the Biden administration's recent decision to grant Iran access to $10 billion in previously frozen funds, warning the cash will enable Tehran to "support more violence against Israel, the U.S., and our allies."

Rep. Bryan Steil (R., Wis.) is pressing the White House to justify its reauthorization last week of a sanctions waiver that allows Iran to access upwards of $10 billion in assets held outside the country, according to a copy of the lawmaker’s letter obtained by the Washington Free Beacon. Under the authorization, Iraq can pay Iran for multibillion-dollar electricity payments and move the money to third-party countries, which will allow the cash to be converted into euros, making it easier for Tehran to spend the money on humanitarian goods.

Critics of the sanctions waiver, including Steil, are concerned that by freeing up this cash for humanitarian purchases, such as food and medicine, the Biden administration has made it easier for Tehran to divert other funds into its global terrorism enterprise, which has significantly increased its attacks on Israel and U.S. positions in the Middle East since the Iranian-armed terror group Hamas launched its Oct. 7 war on the Jewish state.

There are also increasing concerns among Republican lawmakers and analysts that the Biden administration waived sanctions without safeguarding the cash from Iran’s expenditures on terror groups like Hamas and Hezbollah in Lebanon. Steil’s letter asks the Biden administration to explain why the $10 billion in assets are being moved into third-party countries like Oman, France, and Italy.

"The new waiver permits the conversion of the frozen funds into euros," Steil writes. "This deviates materially from standard practice before 2023," when former president Donald Trump was in office and granted a more narrowly tailored version of the sanctions waiver that ensured Iraq’s payments to Iran remained frozen inside the country in an escrow account. "I am gravely concerned that this expanded access will support more violence against Israel, the U.S., and our allies."

"The timing of this waiver is exceptionally alarming," Steil notes. "Iran has financed Hamas and other regional proxies, and reports indicate Iran’s continued investment in nuclear, missile, and drone programs."

The State Department, in comments to the Free Beacon last week, said the waiver is necessary to ensure Iraq’s energy needs are met, and that the payments to Iran will only be spent on humanitarian goods.

"It is in the U.S. interest that this money leave Iraq and be spent down from Iran's accounts held overseas," a State Department official said at the time.

But Steil and other critics of the decision see the Biden administration opening up financial streams for Tehran at a time when it is fomenting chaos across the Middle East. The United States has not substantially altered its softline approach towards Tehran since Hamas slaughtered more than 1,200 Israelis in one of the most lethal attacks on Israel in recent memory.

"While I understand that Iraq has long had issues with its electricity supply, I still find your administration’s stated justification for this $10 billion waiver to be insufficient," Steil wrote. "We have seen Iran-backed militias in Iraq and Syria escalate hostilities in recent weeks with over 61 attacks on U.S. troops in the region."

Steil is pressing the White House to explain what safeguards are in place "to ensure these funds will be used solely for humanitarian purchases." He also wants to know how the United States will "ensure that the fungibility of funds provided under this waiver will not enable Iran to redirect its existing resources towards terrorism or military activities."

The lawmaker is raising additional questions about the administration’s legal justification for issuing the waiver. In its notice to Congress, the Biden administration said the Iranian funds should move to Oman, France, and Italy, claiming these countries need a pass from U.S. sanctions on the purchase of Iranian oil. However, it remains unclear why these countries in particular were selected.

"Because the mandated report to Congress did not address this issue," Steil wrote, "please explain what ‘exceptional circumstances’ France, Italy, and Oman were facing that did not allow them to reduce purchasing petroleum from Iran."