Iran getting $1.7B from U.S. in "debt and interest"

Iran is getting $1.7B from the U.S. in something the White House is claiming settles a dispute on military equipment sales before the 1979 revolution. Secretary of State John Kerry first announced the settlement in a six paragraph statement posted on the State Department’s website.

This is the latest of a series of important settlements reached over the past 35 years at the Hague Tribunal. In constructive bilateral discussions, we arrived at a fair settlement to this claim, which due to litigation risk, remains in the best interests of the United States.

Iran will receive the balance of $400 million in the Trust Fund, as well as a roughly $1.3 billion compromise on the interest. Iran’s recovery was fixed at a reasonable rate of interest and therefore Iran is unable to pursue a bigger Tribunal award against us, preventing U.S. taxpayers from being obligated to a larger amount of money.

Kerry’s statement also says all U.S claims against Iran were settled years ago and U.S. private companies got over $2.5B from Iran. But he also noted Iran still has outstanding claims against the U.S. so more cash could be headed Iran’s way. This was something President Barack Obama did not make mention of during his speech on the Iran deal/prisoner swap/cash settlement this morning. He just focused on the fact a settlement was reached.

“Since 1981, after our nations severed diplomatic relations, we’ve worked through a international tribunal to resolve various claims between our countries. The United States and Iran are now settling a longstanding Iranian government claim against the United States government. Iran will be returned its own funds, including appropriate interest, but much less than the amount Iran sought.

For the United States, this settlement could save us billions of dollars that could have been pursued by Iran. So there was no benefit to the United States in dragging this out. With the nuclear deal done, prisoners released, the time was right to resolve this dispute as well.”

The timing of all this is extremely curious (and coincidental) to the release of the five prisoners being held in Iran. It’s completely possible the U.S decided to settle the claim levied by Iran as just an added assurance the prisoners would come home. That means the settlement could be seen as a form of ransom but is doesn’t mean it is. The timing, though, is just bizarre. From a PR standpoint, you’d think the Obama Administration would be willing to wait a week or a month to announce the deal to avoid any questions, but it’s possible they were hoping it’d slide because of the NFL playoffs. It could be the administration decided to make the payment now, so it wouldn’t come up in the general election. The entire thing is also questionable because of the Obama Administration’s past stance on ransom payments for prisoners. Here’s what Treasury Department undersecretary David Cohen said in London in 2012 on ransom payments (via The Washington Post).

“Ransom payments lead to future kidnappings, and future kidnappings lead to additional ransom payments. And it all builds the capacity of terrorist organizations to conduct attacks. We must find a way to break the cycle. Refusing to pay ransoms or to make other concessions to terrorists is, clearly, the surest way to break the cycle, because if kidnappers consistently fail to get what they want, they will have a strong incentive to stop taking hostages in the first place.”

It’s important to note the U.S. did change its policy on families deciding whether they wanted to pay ransom for prisoners last year. But The Wall Street Journal noted it seemed to be more along the lines of promising no one would be prosecuted for making a payment, not that the government would do payments.

In the directive, the White House will make clear that U.S. policy allows victims’ families and the U.S. government itself to enter into “communications” with hostage takers, their intermediaries or other governments to try to secure the release of American hostages, the officials said.

While the directive will stop short of saying victims’ families can pay ransoms to hostage takers, administration and law-enforcement officials will issue public assurances Wednesday that victims’ relatives won’t be threatened with prosecution for doing so.

The rules are probably different when it’s sovereign nation negotiating with sovereign nation, but shouldn’t private families be able to pay a ransom if they want to? It seems logical they should be allowed to, but logic doesn’t always exist in the government. So what happens if this was a ransom payment? It really doesn’t change anything, except to show the hypocrisy of Washington D.C. when it comes to “negotiating with terrorists” or terrorist nations. But this is the U.S. and consistency in foreign policy isn’t something which is expected at all.

The other question is why did it take so long for this agreement to be reached? Is it just because of the strain between the U.S. and Iran or because Iran was asking for that much money? Why wasn’t this settled beforehand when all the other cases were? It’s doubtful the White House will be willing to discuss this, so the speculation will just keep going on and on. It’s fantastic the five prisoners are headed home, and I’m extremely thankful they’re being reunited with their families. But it’s still weird this settlement was announced just a day after they were released. It’s possible the settlement is just a settlement and not a payment for prisoner release, but the timing is just really odd. The optimist in me is hopeful it’s just a coincidence, but the cynic in me says it’s not.