The Atlanta Journal-Constitution
Secret Obama-era permit let Iran convert funds to dollars
WASHINGTON — After striking an elusive nuclear deal with Iran, the Obama administration found itself in a quandary in early 2016: Iran had been promised access to its long-frozen overseas reserves, including $5.7 billion stuck in an Omani bank.
To spend it, Iran wanted to convert the money into U.S. dollars and then euros, but top U.S. officials had repeat- edly promised Congress that Iran would never gain access to America’s financial system.
Those assurances notwithstanding, the Obama admin- istration secretly issued a license to let Iran sidestep U.S. sanctions for the brief moment required to convert the funds through an American bank, an investiga- tion by Senate Republicans released Wednesday showed. The plan failed when two U.S. banks refused to participate.
Yet two years later, the revelation is reigniting the bitter debate over the nuclear deal and whether former President Barack Obama was too eager to grant concessions to Tehran.
“The Obama administra- tion misled the American people and Congress because they were desperate to get a deal with Iran,” said Sen. Rob Portman, R-Ohio, who chairs the Senate panel that conducted the investigation.
And Republican Rep. Ed Royce, the House Foreign Affairs Committee chairman, accused Obama of trying to “hide a secret push to give the ayatollah access to the U.S. dollar.”
Not so, former Obama administration officials said, arguing the decision to grant the license adhered to the spirit of the deal, which included allow-
ing Iran to regain access to foreign reserves that had been off-limits because of U.S. sanctions. They said the public assurances that Iran would be kept out were intended to dispel incorrect reports about nonexistent proposals that would have gone much further by letting Iran actually buy or sell things in dollars.
The former Obama officials disputed that the momentary access to U.S. banks to convert funds through the dollar constituted “access to the U.S. financial system.” What’s more, they dismissed the report as another exam- ple of a faulty approach to Iran policy by Republicans and by President Donald Trump, who last month with- drew the U.S. from the land- mark 2015 nuclear accord.
“They continue to malign the deal in an effort to justify President Trump’s unjustifiable decision,” said Ned Price, who was Obama’s White House National Secu- rity Council spokesman, referring to GOP lawmakers.
Still, the report by the Sen- ate Permanent Subcommit- tee on Investigations sheds light on the delicate balance the Obama administration sought to strike after the deal,
as it worked to ensure Iran received its promised benefits without playing into the hands of the deal’s oppo- nents. Amid a tense polit- ical climate, Iran hawks in the U.S., Israel and elsewhere argued that the United States was giving far too much to Tehran and that the wind- fall would be used to fund extremism and other trou- bling Iranian activity.
The Treasury Department license, issued in February 2016 and never disclosed, would have allowed Iran to convert $5.7 billion it held at Oman’s Bank of Muscat from Omani rials into euros by exchanging them first into dollars. If the Omani bank had allowed the exchange without such a license, it would have violated sanc- tions that bar Iran from trans- actions that touch the U.S. financial system.
The situation resulted from the fact that Iran had stored billions in Omani rials, a cur- rency that’s notoriously hard to convert. The U.S. dollar is the world’s dominant cur- rency, so allowing it to be used as a conversion instru- ment for Iranian assets was the easiest and most efficient way to speed up Iran’s access to its own funds.