State Department Acknowledges Lack of Transparency Over Iran Payment

By Patrick Goodenough | September 8, 2016 | 4:17am EDT
Secretary of State John Kerry and Iranian Foreign Minister Mohammad Javad Zarif led their delegations in the nuclear negotiations in Austria and Switzerland, leading to an agreement in July 2015. (AP Photo, File)

(CNSNews.com) – State Department spokesman Mark Toner acknowledged Wednesday that the administration had not been completely forthcoming about how Iran was paid $1.7 billion earlier this year, after the Treasury Department confirmed that payment of the full amount had been made in cash.

Toner attributed the “piecemeal way in which we’ve divulged the details” to an “overabundance of caution” regarding protecting the confidentiality of other parties that helped in the transaction.

“How do you address the question of – or the suggestion that the reason that you guys really withheld many of the details was that you thought it would look bad?” a reporter asked.

Toner said he “would not accept that.”

“With regard to the, as I said, the piecemeal way in which we’ve divulged the details of the financial transaction with the 1.3 billion [the interest portion of the payout], all I can say is that that was done out of a – as I said, out of a sense of we wanted to preserve the confidentiality of their intermediaries.”

Toner said he could understand “some of the frustration over the level of detail that we were able to divulge or talk about or discuss openly with regards to this transaction.”

“I think it was done out of an overabundance of caution with regard to the confidentiality of these financial transactions,” he added. “We’re trying to be as transparent as possible now in talking about the fact that we did, in fact, pay this interest settlement in cash.”

Last January the administration announced it had reached a settlement with Iran of a legal dispute dating back to the early days of the Iranian revolution. The disputed sum was $400 million in frozen Iranian funds, plus a negotiated $1.3 billion in interest.

The original announcement was silent on the mechanics of the payment, but a media report early last month revealed that the $400 million principal had been flown into Tehran in the form of foreign currency banknotes.

The cash arrived on the same day as the regime freed four imprisoned Americans, prompting Iran critics in Congress to charge that the administration had effectively paid a “ransom” – an accusation which officials continue to deny.

The administration ascribed the unconventional payment method to the fact Iran had been cut off from the international banking system by sanctions imposed in response to its nuclear activities. More usual payment processes were therefore not possible.

“The reason that we had to give them cash is precisely because we are so strict in maintaining sanctions and we do not have a banking relationship with Iran that we couldn’t send them a check and we could not wire the money,” President Obama said on August 4.

Over the ensuing weeks, however, the State Department repeatedly declined to say how the $1.3 billion in interest had been transferred to the Iranians, citing the need for confidentiality.

Late on Tuesday, the Treasury Department finally confirmed that the $1.3 billion, too, had been paid in cash.

Toner, who said the interest had been paid in two cash instalments, was asked about the administration’s shift on speaking about the matter.

“I want to know what changed about the privacy and confidentiality of the whole process, where that you couldn’t talk about it in August, but all of a sudden now it’s okay to talk about?” a reporter asked.

“And the reason that I’m asking this is because for an administration that prides itself on being so transparent – the most transparent – this has been anything but,” he continued.

Toner said it was true that the administration’s “international partners did ask us not to publicly talk about their roles in this transaction.”

“And so we are continuing to look very closely at what we can release publicly and talk about publicly while, at the same time, respecting the confidentiality of the partners who we work with to carry out this transaction,” he said.

‘It’s the first time I’m hearing about that’

The payment to Iran came from the Treasury Department’s “Judgment Fund,” which the department describes as “a permanent, indefinite appropriation available to pay judicially and administratively ordered monetary awards against the United States.”

Among still-unanswered questions relating to the payment is the fact that the interest portion appears to have actually exceeded $1.3 billion – to the tune of $10,390,236.15.

The amount released from the judgment fund was broken down into 13 equal sums of $99,999,999.99, plus a further sum of $10,390,236.28 – together totaling $1,310,390,236.15.

Asked Wednesday about that 14th payment of almost $10.4 million, Toner said he would seek clarification from the Treasury Department.

“It’s the first time I’m hearing about that,” he said.

When running for the White House in 2007, Sen. Obama pledged to dramatically increase transparency in government, and in 2013 the president claimed to have delivered “the most transparent administration in history.”

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