The nuclear deal with Iran may run afoul of federal law — a statute signed into law by none other than Barack Obama himself. Fox News’ James Rosen points out that the JCPOA explicitly requires the US to license economic opportunities for American firms, or at least their foreign subsidiaries. But the Obama administration may have to ask Americans to swallow a very large lie in order to make it work:

At issue is a passage tucked away in ancillary paperwork attached to the Joint Comprehensive Plan of Action, or JCPOA, as the Iran nuclear deal is formally known. Specifically, Section 5.1.2 of Annex II provides that in exchange for Iranian compliance with the terms of the deal, the U.S. “shall…license non-U.S. entities that are owned or controlled by a U.S. person to engage in activities with Iran that are consistent with this JCPOA.”

In short, this means that foreign subsidiaries of U.S. parent companies will, under certain conditions, be allowed to do business with Iran. The problem is that the Iran Threat Reduction and Syria Human Rights Act (ITRA), signed into law by President Obama in August 2012, was explicit in closing the so-called “foreign sub” loophole.

Indeed, ITRA also stipulated, in Section 218, that when it comes to doing business with Iran, foreign subsidiaries of U.S. parent firms shall in all cases be treated exactly the same as U.S. firms: namely, what is prohibited for U.S. parent firms has to be prohibited for foreign subsidiaries, and what is allowed for foreign subsidiaries has to be allowed for U.S. parent firms.

What’s more, ITRA contains language, in Section 605, requiring that the terms spelled out in Section 218 shall remain in effect until the president of the United States certifies two things to Congress: first, that Iran has been removed from the State Department’s list of nations that sponsor terrorism, and second, that Iran has ceased the pursuit, acquisition, and development of weapons of mass destruction.

The latter presents no real problem for the Obama administration. They have been saying all along that Iran has ceased those activities since signing the agreement, and that they will be able to find out if Iran reneges on the deal. No one actually believes that except for the White House and (some of) their defenders, but that has been the argument all along for the deal with Iran.

Any attempt to sell Congress or anyone else on the former, however, will produce gaping jaws, if not full-throated guffaws. Iran’s support for proxy terror armies is not just obvious, it’s practically a point of pride for the mullahs. Hezbollah and Hamas have comprised the shock troops for Iranian hegemony in the region for so long that it’s no longer even debated. On top of that, the Iranian Revolutionary Guard Corps (IRGC) Quds Force is a terror army in itself. But don’t take my word for it — John Kerry’s State Department makes that clear:

Since the conclusion of OPE, Iranian governmental officials have publicly stated a willingness to resume Iran’s military support of Hamas, including arming Hamas in the West Bank with the same weapons as in Gaza, but it remains unclear whether efforts have resumed.

Israeli security officials and politicians remained concerned about the terrorist threat posed to Israel from Hizballah and its Iranian patron, highlighting that Iran, primarily through the efforts of the Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF), continued to transfer arms to Hizballah. Israeli experts believe that Iran is trying to arm Hizballah with advanced weapons systems such as anti-air and anti-ship cruise missile systems, as well as continuing to transfer long-range rockets into Lebanon. Also, Israeli officials were concerned about the proliferation of conventional and non-conventional weapons from Syria to terrorist organizations. According to the Government of Israel, Hizballah has stockpiled approximately 100,000 missiles in Lebanon since the 2006 Lebanon War, some of which are capable of striking anywhere in Israel, including population centers.

Iran has admitted publicly that it armed Hizballah (in violation of UN Security Council Resolutions (UNSCRs) 1701 and 1747) with advanced long-range Iranian manufactured “Fateh” missiles. In late November, General Amir Ali Hajizadeh, the head of the IRGC Aerospace Division admitted that “The IRGC and Hizballah are a single apparatus jointed together” (Fars news agency, 29 November). …

In 2014, Iran’s state sponsorship of terrorism worldwide remained undiminished through the Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF), its Ministry of Intelligence and Security, and Tehran’s ally Hizballah, which remained a significant threat to the stability of Lebanon and the broader region.

Alternately, one can take the word of the Iranians:

General Amir Ali Hajizadeh, head of the IRGC Aerospace Force stated in November that “The IRGC and Hezbollah are a single apparatus jointed together,” and Lebanese Hizballah Deputy Secretary General Naim Qassem boasted that Iran had provided his organization with missiles that had “pinpoint accuracy” in separate November public remarks. Iran has provided hundreds of millions of dollars in support of Lebanese Hizballah in Lebanon and has trained thousands of its fighters at camps in Iran. These trained fighters have used these skills in direct support of the Asad regime in Syria and, to a lesser extent, in support of operations against ISIL in Iraq. They have also continued to carry out attacks along the Lebanese border with Israel.

This leaves the White House with limited options, Rosen reports:

Administration sources told Fox News it is the intention of Secretary of State John Kerry, who negotiated the nuclear deal with Iran’s foreign minister and five other world powers, that the re-opening of the “foreign sub” loophole by the JCPOA is to be construed as broadly as possible by lawyers for the State Department, the Treasury Department and other agencies involved in the deal’s implementation.

But the apparent conflict between the re-opening of the loophole and existing U.S. law leaves the Obama administration with only two options going forward. The first option is to violate ITRA, and allow foreign subsidiaries to be treated differently than U.S. parent firms. The second option is to treat both categories the same, as ITRA mandated – but still violate the section of ITRA that required Iran’s removal from the State Department terror list as a pre-condition of any such licensing.

They could ask Congress to repeal ITRA, which would solve the problem but make it clear that Obama and Kerry want to retreat on combating terrorism. Another option would be to certify that Iran is no longer a state sponsor of terrorism — a laughable conclusion, and one that would haunt Democrats for years, but the only way to be sure that courts don’t force the Department of Justice to enforce the ITRA law.

Or they could just ignore the law altogether, and pretend they have the authority to reopen the loophole that ITRA explicitly closed. Good luck with that approach, one administration lawyer told Rosen:

One administration lawyer contacted by Fox News said the re-opening of the loophole reflects circular logic with no valid legal foundation. “It would be Alice-in-Wonderland bootstrapping to say that [Section] 601 gives the president the authority to restore the foreign subsidiary loophole – the exact opposite of what the statute ordered,” said the attorney, who requested anonymity to discuss sensitive internal deliberations over implementation of the Iran deal.

Don’t underestimate the arrogance of the Obama administration, especially in pursuit of the worst possible policies. Ignoring Iran’s intent to gain nuclear weapons and their two-decade cheating on the Non-Proliferation Treaty was the real down-the-rabbit-hole moment. Pretending a loophole exists that Congress closed directly with Obama’s own signature will hardly cause this White House to break a sweat.