Trump Admin Poised to Cave on Iran Sanctions

Iran set to get major pass, keeping ailing economy alive, hardline regime intact

Mike Pompeo Donald Trump
Getty Images
November 1, 2018

The Trump administration is poised to offer a series of major concessions to Iran that will let it escape key economic sanctions that the administration once vowed would kick back into force in the next several days, according to multiple U.S. officials and administration insiders familiar with the state of play.

Senior State Department officials working on the Iran issue are said to have convinced Secretary of State Mike Pompeo to permit Iran to remain connected to the international banking system, providing a key lifeline to Tehran as its economy teeters on the brink of collapse.

While President Donald Trump vowed to enforce a bevy of new sanctions, senior officials in both the State and Treasury Departments caved to pressure from European allies and Iran, officials confirmed to the Washington Free Beacon.

Iran is now set to continue doing business on the international banking system known as SWIFT, sources said. Additionally, the Trump administration will grant waivers to several countries allowing them to continue purchasing Iranian oil, another concession that the administration once said would not take place.

These concessions, pushed by European allies seeking to keep doing business with Iran as the United States readies new sanctions on Nov. 4, have sparked outrage among Iran hawks on Capitol Hill and among some within the administration who have been pushing for a hardline on Iran.

The sanctions rollout is expected to take place early Friday, though the White House National Security Council leader John Bolton has declined to participate, as previously scheduled, sources confirmed. The cancelation is driving further speculation about unhappiness over the concessions to Iran.

The Free Beacon first reported last week that the administration was considering allowing Iran to remain connected to SWIFT. Since that time, senior State Department officials are said to have convinced Pompeo—a vocal and longtime Iran hawk—to go along with this plan, sparking further frustration among those advocating sanctions go fully into effect.

"They're gutting President Trump's maximum pressure campaign," according to one senior congressional staffer briefed by administration officials on Iran and SWIFT.

"Administration officials used to tell us it's OK to give Iran concessions on SWIFT because they would force oil exports down to zero," the source said. "Now they're saying it's OK to give concessions on both SWIFT and energy, because this is just the beginning of a long campaign. It's a surrender dressed up in Obama-era talking points, except Obama officials used to do it better. Congress isn't fooled."

A second senior congressional aide intimately familiar with the situation told the Free Beacon that Obama-era holdovers in the State Department and those loyal to former Secretary of State Rex Tillerson have been leading the push to water down Iran sanctions.

"The deep state and Tillerson holdovers are striking back, pulling the wool over President Trump's eyes and keeping Obama's Iran nuke deal on life support in the hopes of restoring it after Trump," the source said, speaking only on background about the sensitive situation.

The concessions to Iran are said to include oil waivers to countries such as China, South Korea, and India, all of which purchase Iranian crude oil. Just several months ago, administration officials told the Free Beacon that waivers would not be an option in light of Trump's desire to reduce Iranian oil imports to zero.

Sources further confirmed that a series of briefings will be held in the next days disclosing these new concessions.

As the State and Treasury Departments work to weaken the impact of new sanctions, some in Congress are examining methods to force the administration's hand.

Sen. Ted Cruz (R., Texas) is working on legislation that would mandate Trump impose sanctions related to SWIFT, according to sources familiar with the legislation, who told the Free Beacon the bill also would likely target the visas and assets of SWIFT board members that enable Iran to continue using the banking system.

Additionally, the bill provides Trump with expanded ways to target Iranian banks for their financing of global terror operations. This includes sanctions for helping Iran to develop a crypto-currency to evade U.S. sanctions. Iranian officials in recent months have suggested this is one avenue they might pursue.

One veteran foreign-policy hand who has worked on the Iran issue with the Trump administration told the Free Beacon that Pompeo was pushed into taking a softer line on Iran sanctions.

Senior officials were "able to get Mike Pompeo to cave on Iran and preserve the JCPOA [nuclear deal] in hopes of restarting talks with the Europeans," said the source. "This is a total cave to Tehran and a disservice to the president."

Treasury Secretary Steven Mnuchin and Pompeo "just made Donald Trump weaker than Barack Obama," the source said. "They're going to say something like, 'Oh we can watch and wait and see.' Wait for what? A nuclear weapon aimed at Tel Aviv?"

The State and Treasury Departments would not comment on the latest developments when asked by the Free Beacon.

Update 4:36 p.m.: This piece has been updated to include further information from congressional sources.