The Obama administration is pushing a pathway to ensure it can continue sending Iran cash payments amid mounting accusations it laundered some $1.7 billion to the Islamic Republic as part of a "ransom payment" to free U.S. hostages earlier this year, according to statements by the White House and sources familiar with the matter.
The White House late Wednesday promised to veto new legislation—first disclosed by the Washington Free Beacon—that would bar the administration from making "future ransom payments to Iran," prompting outrage from key members of Congress who have been investigating how U.S. officials delivered nearly $2 billion in cash to Iranian officials.
The administration's veto threat comes as top lawmakers on a range of investigatory committees launch efforts to uncover details about the cash exchange still being hidden by the Obama administration.
Congressional sources who spoke to the Free Beacon raised questions as to why the Obama administration would threaten to veto the bill, given its insistence that the cash payments to Iran were not part of a ransom.
"President Obama’s veto threat on our ransom legislation puts the lives of U.S. citizens around the world at risk," Rep. Mike Pompeo (R., Kan.), a member of the House Intelligence Committee who helped spearhead the ransom legislation, told the Free Beacon.
"Instead of admitting wrongdoing, this administration is sticking to talking points. But selective noun use cannot explain away criminality, nor does it excuse eight months of lying to the American people," Pompeo said. "It is unprecedented and reckless for the U.S. to be doling out billions to the Islamic Republic of Iran—under wraps and in cash—which is why our bill is necessary."
Sen. Marco Rubio (R., Fla.), a lead sponsor of the legislation to ban future payments to Iran, told the Free Beacon that he would continue to push the legislation, despite threats by the administration.
"This effort by the President to defend his ransom payments to Iran at all costs amounts to doubling down on a policy that has made Americans less safe," Rubio told the Free Beacon. "Democrats may be swayed by this threat, but I will continue to fight to prevent the U.S. government from sending taxpayer dollars to the world's foremost state sponsor of terrorism."
One source familiar with the matter said Iran prefers cash because it can more easily be used to fund terrorism.
"There is no credible reason for the administration to oppose this bill. We already know, contrary to what the president initially said, that the administration can in fact wire money to Iran," the source said. "So why do we need the option to pay in cash? Simple. This money can fund terrorism, and there's nothing we can do to know of stop it."
The Obama administration maintains the legislation is "ill-advised" and would "undermine U.S. obligations" to Iran.
The bill is "an ill-advised attempt to respond to a problem—so-called 'ransom' payments to Iran—that does not exist, in a way that would undermine U.S. obligations and ultimately benefit Iran at the expense of the United States," the White House said in a statement.
The administration said it plans to award Iran further payments, which would not be possible under the ransom legislation.
"This bill, while styled as prohibiting future purported ‘ransom payments,’ instead bars virtually any payment from the U.S. government to Iran, including those permitted or even required by law," the administration said.
The $1.7 billion cash payment was given to Iran as part of an effort to resolve decades-old legal disputes, many of which are still outstanding. The administration said further payments could be made to Iran in order to settle these disputes.
"Specifically, this bill would effectively prevent the United States from paying out awards rendered by the Tribunal and, thus, risk putting the United States in violation of our obligations under the Algiers Accords—an agreement concluded by President Carter, endorsed by President Reagan and honored by every President since that time," according to the White House.
Questions remain about why the administration chose to pay Iran in cash installments routed through the New York Federal Reserve and several European banks.
Lawmakers such as Pompeo and Sen. Ted Cruz (R., Texas) have described the administration's process as tantamount to a money laundering scheme.
UPDATE 8:40 P.M.: This piece was updated to include comments from Sens. Marco Rubio (R., Fla.) and Mark Kirk (R., Ill.).