President Barack Obama’s administration reportedly misled Congress — and the American people — about a crucial element of the Iran nuclear deal.
A GOP-led investigation by the Senate Permanent Subcommittee on Investigations revealed on Wednesday that Obama’s Treasury Department secretly worked on a license to allow Iran access to the American financial system.
A license, according to the Treasury Department, is “an authorization from [Treasury] to engage in a transaction that otherwise would be prohibited.”
It’s a big claim. Recall that the Iran deal had the US lift certain sanctions on Tehran in exchange for Iranians curbing their nuclear program. But the US didn’t remove every penalty after signing the agreement in 2015 — meaning that Iran’s access to the US financial system was still limited.
But according to the new report, the US Treasury Department issued a license to Oman’s Bank of Muscat on February 24, 2016. That license would have let Iran change $5.7 billion worth of Omani rials it held at the bank into euros — after first changing them into US dollars.
Iran could not change money into dollars without the license, since this would have violated sanctions that were still in place.
However, two US banks refused to help with the conversion of Iranian-owned Omani rials into dollars — even after Obama officials approached them — reportedly citing a severe hit to their reputations. After all, they knew they would be perceived as circumventing the Iran nuclear deal and aiding Tehran.
The Associated Press was the first to report on the Senate subcommittee’s findings.
Sean Kane, a former sanctions official in Obama’s Treasury Department and now a lawyer at Dechert LLP, told me that Treasury “is not and was not in the practice of allowing Iran even indirect access to the US financial system.”
He continued, “What is being reported appears to be a limited authorization that would have allowed a one-time conversion of specific Iranian reserves held abroad, not something that allowed them to continue accessing the US financial system on a going-forward basis.” Kane also noted that Treasury can issue licenses based on America’s changing foreign policy needs.
That’s not how some critics see it. “The Obama effort to boost Iran’s economy not only ran counter to American interests, it skirted the law,” Jonathan Schanzer, an Iran expert at the conservative Foundation for the Defense of Democracies think tank, tweeted on Wednesday.
Did the Obama administration lie about helping Iran?
What makes this revelation worse, Republican lawmakers say, is that the Obama administration may have at best misled — and at worst, deliberately lied — about granting Iran limited access to the US financial system.
“The Obama administration misled the American people and Congress because they were desperate to get a deal with Iran,” Sen. Rob Portman (R-OH), the subcommittee’s chair, said in a statement.
Here’s why Portman and others make that claim: In Wednesday’s report, they note statements from top Obama officials saying that this type of action wasn’t a possibility. Iran “will continue to be denied access to the [US’s] financial and commercial market,” then-Treasury Secretary Jack Lew told the Senate Foreign Relations Committee in July 2015.
And Adam Szubin, a top Treasury official under Obama, said this to the Senate Banking Committee later that month: “Iranian banks will not be able to clear US dollars through New York, hold correspondent account relationships with US financial institutions, or enter into financing arrangements with US banks.”
It’s still unclear if there was a coordinated effort to keep this specific license hidden from Congress and the American people. But clearly, the Obama administration covertly did more to help Iran than previously known.