Sunday, January 12, 2020

Treasury’s Role in Financing Iranian Terror - John A. Cassara

by John A. Cassara

Donald Trump should make it a priority to find out exactly what Obama's Treasury Department did to give billions to Iran

There are reports that some of the $1.7 billion that Obama gave to Iran as part of the Iran deal or Joint Comprehensive Plan of Action (JCPOA) has been traced to Iran-backed terror groups, including Qassem Soleimani’s Quds Force, Iran’s principal foreign intelligence and covert action arm and part of the Islamic Revolutionary Guards Corps. What is not discussed is that the money could not have been funneled to Iran without active support from actors within the Treasury Department.

As a former Treasury Special Agent, the suspect actions of some of my ex-colleagues saddens and dismays me. Their actions also hypocritically counter both our anti-money laundering/counter-terrorist finance programs and the international financial systems and safeguards that Treasury worked hard to implement and protect.

Since 1979 Iran has conducted virtual acts of war and terror against the United States and our allies. The State Department designated Iran as the world’s worst state sponsor of terrorism. Iran is also one of the most corrupt regimes in the world.

So why did some Treasury officials move to obfuscate, if not launder, the money that Obama wanted delivered to the mullahs in Iran? Why did Treasury participate in a quid pro quo or act of bribery? Why would they engage in subsequent deception and cover-up?

he short answer is Treasury willfully became blind and politicized. It wasn’t just the Department of Justice and John Brennan’s CIA that were sullied during the Obama administration.

In 2018, columnist Mark Theissen discussed some of Treasury’s suspicious activities in his article, “Obama took Lying to New Heights with the Iran Deal.”
  • Obama failed to disclose to Congress secret side deals on inspections when he transmitted the nuclear accord to Capitol Hill.
  • Treasury secretly tried to help Iran use U.S. banks to convert $5.7 billion in Iranian assets, after promising Congress that Iran would not get access to the U.S. financial system. Treasury officials then apparently lied to Congress about what the administration had done.
  • Senate investigators found that the Treasury Department “granted a specific license that authorized a conversion of Iranian assets worth billions of U.S. dollars using the U.S. financial system” including unlimited future Iranian deposits at Bank Muscat in Oman until the license expired.
  • After issuing the license, Treasury explicitly denied to Congress that it had done so.
  • Treasury’s Office of Foreign Assets Control (OFAC) "encouraged two U.S. correspondent banks to convert the funds." Senate investigators found "both banks declined to complete the transaction due to compliance, reputational, and legal risks associated with doing business with Iran."
  • In response to Congressional inquiries, Treasury officials declared "The U.S. Department of Treasury is not working on behalf of Iran to enable Iranian access to U.S. dollars elsewhere in the international financial system, nor are we assisting Iran in gaining access to dollar payment systems outside the U.S. financial system. The Administration has not been and is not planning to grant Iran access to the U.S. financial system." The facts contradict Treasury’s statement.
  • Treasury participated in approximately 200 international "roadshows" where it encouraged foreign financial institutions to do business with Iran "as long as the rest of the world left the United States out of it."
The Obama administration also signed a secret document lifting sanctions on two Iranian state banks that were previously blacklisted for their involvement in financing Iran's ballistic missile program. This occurred the same day Tehran released four American prisoners. In prior years, Treasury was vehemently opposed to the same banks for their alleged role in financially backing Iran's missile program. 

President Obama had the right to conduct and implement his foreign policy. Certainly, politically attuned attorneys in Treasury and elsewhere provided rulings and legal cover for the JCPOA. President Trump exercised the same right to rescind the JCPOA, an agreement he called “one of the worst and most one-sided transactions the United States has ever entered into.” 

There is conflicting information about the specifics of the $1.7 billion sent to Iran. There has never been a full and transparent accounting showing how Treasury effected payment (e.g., manner of wire transfers, use of foreign banks, foreign currencies, flights of pallets of cash to Iran?). The U.S. military and intelligence community has been able to follow some of the money as it was routed to Iranian-backed terror groups but we lack details. How did they track it? Were the money transfers hidden, disguised or laundered? Were additional parties or conduits involved? Were waivers or exemptions granted to skirt sanctions? Was the U.S. government subsequently able to follow the money trail to corrupt Iranian officials? The money has certainly not been used to better the lives of the Iranian people. 

There are also charges and counter-charges about Iran’s right to compensation. 

Before the 1979 Islamic revolution, Iran’s government put $400 million for military equipment into the Pentagon’s Foreign Military Sales (FMS) account. In 1981, Iran filed a claim at The Hague to have that money returned. 

The Obama administration contended that the $1.7 billion sent to Iran represented the $400 million plus $1.3 billion in interest and that the money legally belonged to Iran. That’s simplistic and doesn’t tell the whole story. In 1981, the US filed an $817 million counterclaim alleging that Iran violated its obligations under the FMS program. Some observers feel that it is Iran that owes the U.S., as the list of sponsored attacks, victims, and damages against Americans is long, bloody, and costly. 

In 2000, President Bill Clinton signed a law stipulating that Iran’s FMS account could not be refunded until court judgments against Iran for damages from terrorist acts against American citizens were resolved to America’s satisfaction. Obama ignored the law. To date, U.S. courts have ruled Iran owes nearly $55.6 billion to American victims of its terror. 

There are also still questions about the JCPOA agreement’s promises to lift sanctions on Iran’s economy in exchange of Iran scaling back its nuclear program. It is estimated the JCPOA resulted in the release of between $50 - $150 billion in frozen Iranian assets in the international financial system. Commentator Mark Levin looked at the numbers and said, “Obama is the biggest funder of terrorism the world has ever seen.” 

Treasury is justifiably proud of innovative tools such as sanctions and designations it developed to fight the War on Terror. It is sad and ironic that the same Department of Treasure facilitated some of Iran’s terror. 

The Treasury’s Office of Inspector General should conduct an internal review of Obama’s Treasury regarding the above. Judicial Watch, a nonprofit group promoting government transparency, could get involved. 

The best course of action would be for President Trump -- while his impeachment plays out for his alleged “abuse of power” and “obstruction of Congress” -- to order the Departments of Treasury, Justice, and State, the National Security Council, and elsewhere to release all documents, including emails, touching upon the Obama administration’s deliberations on paying Iran’s claim, any linkage to the JCPOA, and possible side deals. President Trump should also order a full accounting of the form and method of the $1.7 billion payment to Iran. 

Americans deserve full transparency and accountability about the Obama Treasury Department’s role in providing money to the Iranian terror regime.  

John A. Cassara is a former U.S. intelligence officer and Treasury special agent, author, and consultant. He has written numerous books and articles on money laundering and terror finance. Additional information is available at
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