Obama Admin Accused of Misleading Congress on Cash Release to Iran

Lawmakers say administration offering contradictory facts about payouts

John Kerry
John Kerry / AP
April 26, 2016

The Obama administration faces accusations it has been misleading Congress about the amount and destination of sanctions relief being provided to Iran as part of last summer’s nuclear agreement, according to lawmakers and congressional sources who expressed anger at the administration over a range of contradictory facts being offered about the payouts.

Secretary of State John Kerry came under scrutiny last week after saying in a statement that Iran has received only about $3 billion in sanctions relief to date—a figure far smaller than the $100 billion estimate administration officials had previously said Iran would receive under the deal. It also contradicts statements from top Iranian officials that they had regained control of $100 billion in foreign reserves unfrozen under the deal.

The statement came amid congressional allegations, detailed by the Washington Free Beacon, that Kerry and Iranian Foreign Minister Javid Zarif are engaged in a campaign to facilitate even more sanctions relief than Iran is entitled to under the deal. Congressional sources suggested that Kerry’s statements about the amount and nature of this money might be part of that campaign.

The issue has frustrated lawmakers who remain concerned that Iran will use this newly available money to fund its global terrorism operations.

Attempts by congressional offices to clarify the source of Kerry’s claim have gone unmet by the State Department, which also declined repeated requests from the Free Beacon to provide specific estimates as to how much money Iran will be able to access under the deal.

"Do you remember the debate over how much money Iran was going to get?" Kerry asked during a recent speech before supporters of the left-leaning advocacy group J Street. "You heard—sometimes you hear some of the presidential candidates putting a mistaken figure out of 155 billion. I’ve never heard—we never thought it would be that."

"Others thought it would be about $100 billion because there was supposedly $100 billion that was owed, and so forth," Kerry said. "We calculated it to be about $55 billion when you really take a hard look at the economy and what is happening. Guess what, folks—you know how much they have received to date as I stand here tonight? About $3 billion. So what we said to people was true."

The State Department has been unable to provide congressional officials with specific details regarding the source of Kerry’s claim, prompting accusations from some that the administration is obfuscating details about the amount of money Iran will gain access to under the nuclear deal.

"The secretary was making the point that the claims that $100 or $150 billion in Iranian assets would be unfrozen were, as we always knew, wrong," a State Department official informed congressional sources following a request for information on Kerry’s figure, according to a copy of that exchange obtained by the Free Beacon. "We have estimated that as a result of this lifting of financial and banking secondary sanctions, Iran’s usable liquid assets are about $50 billion, of the approximately $100 billion in its own funds in overseas accounts."

This estimate "is based on our awareness that Iran nominally has about $100 billion dollars total in foreign exchange assets overseas, with about $50 billion already committed," the official said. "On the specific amount of money the Iranians have used so far, I don’t have anything to add. I don’t think anyone would have expected that Iran would use all of its estimated $50 billion abroad in three months since implementation day."

The State Department did not respond to further attempts by congressional officials to discern the source of these claims.

A State Department official would not provide the Free Beacon with a total estimate of how much Iran would receive in unfrozen assets as a result of the deal.

The situation has left some in Congress frustrated over what they call attempts by the administration to mislead about the total amount of money Iran will receive.

"While bragging to J Street, Secretary of State Kerry inexplicably claimed Iran has only ‘received’ $3 billion in sanctions relief under the nuclear deal," Sen. Mark Kirk (R., Ill.) told the Free Beacon. "The administration and its supporters won’t hold Iran fully accountable for ballistic missile tests and now they are obfuscating the nuclear deal’s financial benefits to Iran."

Rep. Mike Pompeo (R., Kan.), a member of the House intelligence committee, also criticized the administration for rebuffing attempts to fully determine the amount of sanctions relief being awarded to Iran.

"Secretary Kerry himself has acknowledged that some of this money will end up in the hands of terrorists," Pompeo told the Free Beacon. "The State Department’s inability, or refusal, to accurately estimate the amount of money the Islamic Republic of Iran is receiving raises even more serious questions."

"Whether Iran has received $3 billion in sanctions relief so far, as Secretary of State John Kerry seems to think, or whether it will get $150 billion, as other experts estimate, it is all far too much money to be flowing to the world’s largest state sponsor of terrorism," Pompeo said.

The claim also has rankled senior Republican foreign policy aides in Congress, who recently circulated an internal email in the Senate disputing Kerry’s claim.

With the subject line "When does $100 billion = $3 billion?", the email reads, "When you’re the secretary of state trying to mislead the American people about the economic benefits redounding to Iran under the nuclear agreement," according to a copy obtained by the Free Beacon.

"It is completely misleading for Secretary Kerry to suggest that the economic benefit Iran has received under the JCPOA thus far is only $3 billion," the email continues. "Iran has been given access to $100 billion in its foreign exchange reserves and its economy receives the benefit of that, even if it chooses not to repatriate all those funds. In fact, it would be financial malpractice for it to repatriate all of those reserves immediately. Having access to all of those funds, while keeping some of them outside the country, presents an economic benefit to Iran."

"No matter how the secretary of state may wish to minimize the economic benefits accruing to Iran under the JCPOA, the simple fact remains, the Iranian economy is benefiting from access to $100 billion as a function of sanctions relief under the Iran nuclear agreement," the email concludes.

One senior congressional aide who works on the Iran issue told the Free Beacon that the State Department may not be able to prove Kerry’s claim.

"The Iranian government says the nuclear deal gave them access to roughly $100 billion in previously frozen assets in foreign accounts, yet Secretary Kerry went before J Street to claim that Iran only received ‘about $3 billion’ in sanctions relief," the source said. "I don’t know why the administration adamantly refuses to detail the facts underlying Secretary Kerry’s curious claim, unless there are no facts to actually detail."

A recent investigation by the Congressional Research Service determined that Iran has been spending billions to pay terrorist fighters. Iran’s defense budget is believed to range anywhere from $14 billion and $30 billion a year, with a large portion of that going to fund terrorist groups and rebel fighters in a number of countries.