Obama Admin Withholding Details of 'Potentially Illegal' Deal to Buy Iranian Nuke Materials

Likely to use taxpayer dollars for unprecedented purchase

Mideast Iran Nuclear
part of Arak heavy water nuclear facilities is seen, near the central city of Arak, 150 miles southwest of the capital Tehran / AP
April 27, 2016

Obama administration officials are declining to provide specific details about an unprecedented upcoming purchase of Iranian nuclear materials, an $8.6 million exchange that is likely to be funded using American taxpayer dollars, according to conversations with multiple administration officials and sources in Congress.

The administration is preparing to purchase from Iran 32 tons of heavy water, a key nuclear material, in a bid to keep Iran in compliance with last summer’s comprehensive nuclear agreement.

But administration officials have declined to provide specific details to Congress and reporters about how exactly it will pay for the purchase, as well as other information, until the deal has been completed.

The effort to withhold key information about the purchase, which is likely to be paid in some form using U.S. taxpayer dollars, is causing frustration on Capitol Hill, according to multiple sources who disclosed to the Washington Free Beaconthat the administration is rebuffing congressional attempts to discern further information about the deal.

Experts further disclosed to the Free Beacon that the exchange is likely to legitimize Iran’s research into plutonium, knowledge that would provide the Islamic Republic with a secondary pathway to a nuclear weapon capability.

Officials from both the Treasury and Energy departments told the Free Beacon that details about the payment are being withheld until the purchase is complete. Iran is expected to deliver the heavy water to the United States in the "coming weeks," officials confirmed.

"We cannot discuss details of the payment until after the purchase is complete," a Treasury Department official who was not authorized to speak on record told the Free Beacon. "The Department of Energy’s Isotope Program plans to pay Iran approximately $8.6 million dollars for 32 metric tons of heavy water."

The administration will use an offshore third party to facilitate the transfer of cash to Iran, according to officials in both the Treasury and Energy departments.

"Regardless of whether or not this is in U.S. dollars, this licensed transaction is limited in scope. This routing through third-country financial institutions is similar to the mechanism that has been used for years to allow other authorized transactions—such as for exports of food and medicine—between the United States and Iran," the treasury official said, referencing a loophole in U.S. sanctions that permits transactions of a humanitarian nature.

An Energy Department official confirmed that officials "cannot discuss details of the payment until after the purchase is complete."

The exchange is being handled by the Energy Department’s Isotope Program, which routinely conducts transactions of this nature, according to the official.

"DOE’s Isotope Program produces and distributes a variety of isotopes that are in short supply for industrial and medical purposes," an Energy Department official told the Free Beacon. "Transactions like this one are regular business for the program."

Iran’s excess heavy water "will help to fulfill a substantial portion of U.S. domestic market demand this year," according to the official, who said that "over the past few years, there have often been constrained supplies of heavy water."

The administration further "expects to resell the purchased heavy water at commercially reasonable prices to domestic commercial and research buyers, including Oak Ridge National Laboratory’s Spallation Neutron Source, where it would be used to increase the efficiency of the facility," the source said.

Congressional critics of the arrangement accuse the administration of using this sale as part of a larger plan to help Iran gain access to the American financial system and U.S. dollar.

"Subsidizing Iran’s production of heavy water is a dangerous move," Sen. Tom Cotton (R., Ark.) told the Free Beacon. "It stimulates Iran’s nuclear industry, opens the door to the use of U.S. dollars to facilitate Iranian trade and illicit financing, and provides U.S. tax dollars to the world’s top state sponsor of terrorism."

Energy Secretary Ernest Moniz "is aware of these dangers, which is why he stressed that this is a one-time purchase," said Cotton, the author of a new amendment that would block the administration from engaging in similar purchases with Iran in the future. "I want to hold him and President Obama to that vow, particularly in light of the many promises broken and redlines erased by this administration in the course of negotiating the Iran deal."

Rep. Mike Pompeo (R., Kan.), a member of the House intelligence committee, accused the administration of funding Iran’s nuclear pursuits in contradiction of last summer’s agreement aimed at winding down Tehran’s nuclear ambitions.

"The Obama administration’s deal with the Mullahs in Tehran to purchase heavy water demonstrates a disturbing, potentially illegal, willingness of the administration to subsidize Iran’s nuclear program," Pompeo told the Free Beacon. "This purchase allows the Iranians to offload previously unsellable product and it destigmatizes the act of doing business in Iran."

Pompeo said it is irresponsible to pursue this deal without first providing lawmakers detailed information about whether Iran will directly receive taxpayer dollars.

"This purchase is being made without explanation as to how Iran will receive these funds or what steps the administration is taking to prevent what will almost certainly be U.S. taxpayer dollars from possibly being used to support terrorist activities, Syrian dictator Bashar al-Assad, or Iran’s ballistic missile program," Pompeo said. "Of course, the reality is that once that money is in the hands of the Ayatollah, there is no way to prevent the funds from being diverted toward any of those purposes—a fact that seems to concern no one at the White House."

A larger debate has been taking place in Washington over Iranian and European demands that the United States grant Iran access to dollars, a move the administration has publicly opposed and promised Congress would not take place.

However, sources indicate that the heavy water exchange could be the first sign that the administration is caving on this promise.

 Mark Dubowitz, executive director of the Foundation for Defense of Democracies and head of its Center on Sanctions and Illicit Finance, told the Free Beacon that Iran is producing excess nuclear material in order to wring more cash from the nuclear deal.

"Iran has created a clever scheme—produce too much heavy water so as to break the nuclear agreement, then get the Obama administration and eventually U.S. companies to pay Tehran using the U.S. dollar to get rid of it," Dubowitz explained. "These U.S. subsidies will help Tehran perfect its heavy water production skills so it will be fully prepared to develop its plutonium bomb-making capabilities when restrictions on the program sunset over the next 10-15 years."

"This scheme also will open the door to further dollarized transactions as the administration green-lights the greenback for a regime with a decades-long rap sheet of financial crimes," he added.

A senior congressional source familiar with the trade disclosed that administration officials are declining to disclose key details about the deal.

"The administration is being coy about how the financial mechanics of this deal will work," the source told the Free Beacon. "But the bottom line is that U.S. taxpayer dollars will be used, and used for a purchase directly connected to Iran’s nuclear program. This is an attempt by the administration to slowly open a door that leads to the wide acceptance of Iran’s nuclear industry and to the use of U.S. dollars by Iran to conduct trade."

"Many in Congress—on both the Republican and Democratic sides—won’t stand for that, and will move to shut that door tightly," the source said.

Published under: Iran , Iran Nuclear Deal