State Dept. won’t discuss ‘mechanics’ of $1.3B payment to Iran

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( – President Obama told reporters three weeks ago that the U.S. had flown $400 million in cash to Iran last January because it could not send a check or wire the funds to the regime. The administration will not say how a much larger sum – $1.3 billion in interest – was paid around the same time.

The State Department confirmed Wednesday that the payment of around $1.3 billiondisbursed on January 19 from the Treasury Department’s “judgment fund” was the money paid to Iran as the interest portion of a negotiated legal claim settlement, but declined to discuss the “mechanics” of the payment.

“I can confirm that the foreign claims payments made from the judgment fund on January 19 do represent the payment of approximately 1.3 billion in interest in connection with the Hague Tribunal settlement payment,” spokeswoman Elizabeth Trudeau told a daily briefing.

Queries about the “mechanics” of the payment would have to go to the Treasury Department, she added.

The Hague Tribunal settlement refers to an agreement to pay an Iranian legal claim for $400 million, arising from weapons supply agreements that stalled after the 1979 Islamic revolution.

The $400 million in cash was flown into Tehran last January 16-17, at the same time as the regime released imprisoned Americans. The administration denies it constituted a “ransom” for their freedom.

But now attention has turned onto the $1.3 billion in interest – and precisely how that sum was paid.

After the Wall Street Journal reported early this month on the airlift of $400 million – in foreign banknotes, stacked on pallets on an unmarked cargo plane – Obama explained the decision to send cash by saying the U.S. was not able to wire the funds to Iran or send a check.

“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,” he toldreporters at the Pentagon on August 4.

Against that background, questions are being asked about how the $1.3 billion was in fact paid.

(House Foreign Affairs Committee chairman Rep. Ed Royce has written to Secretary of State John Kerry more than once asking for detailed informationon how the full amount – the $400 million plus the $1.3 billion in interest – was paid.)

The State Department won’t say, but if the $1.3 billion was sent by check or wired to Iran, that would contradict Obama’s Aug. 4 assertions that “we couldn’t send them a check and we could not wire the money.”

It would also raise questions about the need to have sent the initial $400 million in such an unorthodox manner in the first place.

The Treasury Department says on its website that “[t]he preferred method for Judgment Fund payments is by electronic funds transfer (EFT).”

Adding to the mystery: the sum disbursed from the judgment fund on January 19 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.

(Does the odd breakdown give a clue that checks were used? Last fall the Associated Press, citing memos from the IRS and Treasury Department,reported that the Federal Reserve is unable to process checks bigger than $99,999,999.99 electronically. As a result, it said, the IRS would no longer accept checks for sums larger than $99,999,999.99.)

Although it won’t discuss the “mechanics” of the transaction, the State Department has hinted that other parties – perhaps governments or state banks – were involved in the transaction.

“We’ve been very clear about drawing the line at what we’re going to say about the actual financial transaction,” spokesman Mark Toner said at Tuesday’s daily briefing, adding “it touches on certain confidentiality, third parties and other parties who might have been involved in that transaction.”

“We do make a practice of not commenting publicly on transactions, including settlement payments, due to the confidential nature of those payments and to respect the privacy of our international partners,” Trudeau said Wednesday.

If a third party or parties were involved, the U.S. government may have sent checks or wired the funds to them, with the money then sent on to the Iranians in one form or another.

— Written by Patrick Goodenough