Lawmakers Investigate State Department Over $1 Billion Ransom Payment to Iran

Biden admin stonewalling GOP efforts to unearth details about U.S. role in waiving sanctions

Getty Images
March 25, 2021

Republican foreign policy leaders in Congress are pressing Secretary of State Antony Blinken to fully disclose the contents of secret talks with South Korea that are believed to have paved the way for that country to hand Iran $1 billion as part of a ransom payment.

Reps. Bryan Steil (R., Wis.), Jim Banks (R., Ind.), and Greg Steube (R., Fla.) say the State Department is withholding from Congress key details about the Biden administration's reported efforts to help South Korea skirt economic sanctions and pay Iran the billion-dollar ransom, which came after Tehran seized a South Korean tanker and its crew in January. Blinken dodged several questions on the matter when testifying earlier this month before the House Foreign Affairs Committee, prompting the lawmakers to launch a formal probe seeking answers.

In a letter sent Thursday to Blinken and obtained by the Washington Free Beacon, the lawmakers demand the State Department answer questions about whether it waived sanctions to enable the payment and took part in negotiations aimed at securing the cash for Iran. The lawmakers suspect the administration helped free the money—frozen abroad as a result of U.S. sanctions—as part of its efforts to coax Iran into negotiating a revamped nuclear deal.

The probe signals mounting GOP frustration with the Biden State Department as it makes a series of concessions to Iran aimed at enticing it back to the bargaining table. The administration has already waived United Nations sanctions on Iran and removed a key terror designation on the Tehran-armed Houthi militia groups in Yemen, which continue to attack U.S. allies in the region.

As U.S.-Iran envoy Robert Malley seeks direct talks with Iran, Republicans on the House Foreign Affairs and Armed Services Committees have been mostly left in the dark. Malley and other senior officials have not briefed them on their diplomatic efforts and have repeatedly dodged questions about the ransom payment, as well as other reported concessions, such as easing travel restrictions on Iranian officials. Republicans and many of their Democratic colleagues remain concerned the Biden administration will move forward with sanctions relief, despite public promises that this would not occur before Iran demonstrates a willingness to roll back its nuclear program.

Steil petitioned the Treasury Department in early March to come clean about its suspected role in facilitating South Korea's ransom payment. Iran is using the tanker as leverage to pressure South Korea into freeing some $7 billion in oil revenues that are tied up in the country. South Korean officials said they consulted with the United States before releasing the money, which likely could not have been moved without the administration's consent.

The Treasury Department, in response to Steil's initial letter, would not provide the lawmaker with the information he requested, directing him instead to contact the State Department, according to a copy of that response letter viewed by the Free Beacon.

"The Biden administration appears to be using loopholes when dealing with the Iranian regime," Steil told the Free Beacon. "I am again asking direct, yes or no questions on the United States' involvement in facilitating a South Korean ransom payment to Iran. If the Biden administration is involved in transferring funds to Iran, Congress and the American people must be informed."

Now, Steil, Banks, and Steube are pressing Blinken for concrete answers about whether the United States permitted Iran to access the billion dollars through a financial mechanism known as the Swiss Humanitarian Trade Arrangement. The SHTA was created to enable certain humanitarian-related transactions with Iran that would otherwise be considered sanctionable.

Banks, an Armed Services Committee member and chairman of the Republican Study Committee, Congress's largest conservative caucus, told the Free Beacon he and his colleagues will not stop leading investigations into the matter until the administration "comes clean."

"The Biden administration has to come clean: Did you or did you not facilitate sanctions relief for the thugs in Tehran? Because it sure looks like you did," Banks said. "Let me be very clear: The RSC will be getting to the bottom of this."

The RSC and its members have also been leading the charge to stop the Biden administration from unilaterally lifting sanctions on Iran. Through legislation and parallel investigations, the RSC has launched what it describes as an unprecedented effort to handicap the Biden team's diplomacy with Tehran, the Free Beacon first reported last week.

Iranian officials say the money they received from South Korea will be spent on humanitarian relief, such as combating the coronavirus pandemic. The statements signal that Iran knows the money could be easily channeled through SHTA, according to congressional sources tracking the situation.

"Is the State Department or the Department of the Treasury aware of any efforts to allow Iran to access funds held in South Korean financial institutions either through a direct transfer of funds or through the Swiss Channel?" the lawmakers ask.

They also want to know if the Biden administration considers such payments permissible under U.S. sanctions law, particularly as it relates to the reported South Korean ransom payment.

Blinken also must disclose any conversations between the United States and South Korea "wherein a U.S. official suggested that Iran may be allowed to use funds held in South Korean financial institutions," according to the letter.

The lawmakers want a commitment from the State Department that it will not permit Iran to access or use the funds before agreeing to a new nuclear deal that stops the country from enriching uranium to levels needed for an atomic weapon.

"Will the State Department and the Department of the Treasury commit to not allowing Iran to access funds held in South Korean financial institutions through the Swiss Channel before Iran re-enters into compliance with the [nuclear deal]?" they ask.

Published under: Iran