The Senate needs straight answers from this Biden nominee

Jack Lew has some explaining to do. On Oct. 18, the Senate Foreign Relations Committee will hear testimony from the former Obama administration treasury secretary, who is nominated to be US ambassador to Israel at an obviously critical moment. Lew must explain why, in 2015, he promised the same committee that he would not allow Iran access to the US financial system under the recently announced nuclear deal yet secretly tried to do just that — by working to turn $5.7 billion in Iranian assets into easily convertible currency via US banks.

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Lew’s maneuvering as treasury secretary was exposed in a 2018 report from the Senate Permanent Subcommittee on Investigations, led by thenSen. Rob Portman (R-Ohio). The report was widely covered at the time but is now largely forgotten. Senators might want to read the report (including the classified annex) before asking Lew now about its troubling findings.

Here is what subcommittee investigators found — just the facts:

On July 23, 2015, Lew testified before the Foreign Relations Committee that Iran “will continue to be denied access to the [US] financial and commercial market.” He promised that “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.”

Yet seven months later, on Feb. 24, 2016, Lew’s Treasury Department “granted a specific license that authorized a conversion of Iranian assets worth billions of US dollars using the US financial system,” the subcommittee’s report noted. Without this license, which was not disclosed to Congress, the transaction would be an illegal evasion of international sanctions. The license would have allowed Iran to convert $5.7 billion in Omani rials, held by Iran at Bank Muscat in Oman, into euros by first turning them into highly convertible US dollars through a US bank.

Not only that, but the license further authorized Bank Muscat to use the US financial system to convert unlimited additional future Iranian deposits — so-called fresh funds.

This clear effort to circumvent US sanctions fell through, investigators found, only because US banks declined to participate. Treasury officials contacted two banks to encourage them to convert the Omani rials, but “both banks declined to complete the transaction due to compliance, reputational, and legal risks associated with doing business with Iran.” Treasury also sought assistance to convert the funds from the Federal Reserve Bank of New York.

After failing in this effort to help Iran free up these funds, Lew testified on March 22, 2016, before the House Financial Services Committee — and did not disclose that he issued the license.

Portman’s subcommittee found that Lew’s talking points for that hearing warned against candor, advising Lew to reveal the existence of the license only “if pressed.” But, the report states, “in his testimony, Secretary Lew did not disclose the specific license authorizing Iran to access the US financial system. In fact, the Treasury Department maintained Iran was not given access to the US financial system, nor was the US government working to give them access.”

On March 30, 2016, Sen. Marco Rubio (R-Fla.), a member of the Foreign Relations Committee, wrote to Lew expressing alarm at reports that “the Administration is working to give Iran access to the US financial system or to dollar transactions.” Treasury officials assured Rubio in June 2016 that “the US Department of Treasury is not working on behalf of Iran to enable Iranian access to US dollars elsewhere in the international financial system, nor are we assisting Iran in gaining access to dollar payment systems outside the US financial system.”

Investigators further found that Lew sent officials to participate in more than 200 “roadshows” in major cities — including London, Geneva, Tokyo, Berlin, Rome and Paris — seeking to assure banks that his department would not aggressively enforce US sanctions against banks doing business with Iran.

The investigators offered no opinion as to whether Lew lied to Congress. That was not their job. Their role was to uncover and present the facts. Even supporters of the Obama-era nuclear deal with Iran that these deceptions were meant to advance (I am not one) should be wary of such blatant attempts to mislead or evade Congress.

With Israel fighting for its safety against terrorists backed by Iran, Lew’s conduct should be disqualifying. As Sen. Tom Cotton (R-Ark.) said, “He helped Iran evade American sanctions, and he lied to Congress about it.” How can we send an ambassador to Jerusalem who tried secretly to free up billions for Iran after promising not to? How can senators who recently objected to returning $6 billion to Iran now vote for the man who attempted to return $5.7 billion to Iran? And how can members of the Foreign Relations Committee endorse an ambassador without confidence that his words can be trusted?

If Lew can’t explain his conduct, he should not be confirmed.