The Story of Obama’s Ransom Payment to Iran Gets Worse

On the morning of January 17, 2016, President Obama declared that this was “a good day, because, once again, we’re seeing what’s possible with strong American diplomacy.”

The Iran nuclear deal had been implemented the day before—an example, the President said, of his “smart, patient, and disciplined approach to the world.” Now Iran was releasing five American hostages, the result of the administration’s “tireless” efforts. “On the sidelines of the nuclear negotiations,” the president explained, “our diplomats at the highest level, including Secretary [of State John] Kerry, used every meeting to push Iran to release our Americans.” In return for that gesture, the president continued, he was making a “reciprocal humanitarian gesture”: namely, clemency for seven Iranians imprisoned or awaiting trial for criminal violations of American sanctions. Later it was announced that the U.S. had also dropped outstanding warrants against another fourteen Iranians.

The president then added something else: with the nuclear deal implemented, and the hostages released, “the time was right” for “resolving a financial dispute that dated back more than three decades.” That dispute involved an Iranian claim regarding money advanced by the government of the Shah for military equipment that Washington did not deliver after the 1979 revolution. Now, the president asserted, we were returning Iran’s “own funds,” including “appropriate interest,” but “much less than the amount Iran sought.” The savings, he said, came potentially to “billions”—a figure quantified by his press secretary as “up to $6 billion or $7 billion” in a “very good deal for taxpayers.” In other words, now that the larger issues had been resolved, the U.S. was simply issuing a long-delayed refund to Iran, and in the process saving Americans a significant amount of money.