What is the #PalletsOfCash debate?

WASHINGTON – The summer political season was suddenly seized by a heated debate over #PalletsOfCash being delivered to Iran on an unmarked cargo plane.

How did it happen?

In January, the U.S. government said it had sent Iran $ 1.7 billion to settle a decades-old financial dispute over an arms deal. The payment was announced the same day the nuclear deal with Iran was concluded and Tehran freed four American inmates.

Republicans were quick to label the payment as a ransom and appeasement from a rogue state. While the political attacks quickly fizzled out, they came back to life this week when the Wall Street Journal reported a colorful detail: The first installment, $ 400 million, was paid in piles of foreign currency that were flown to Tehran when the American prisoners were released.

Donald J. Trump attacked Hillary Clinton over the payment, claiming she started the talks that led to it. The White House dismissed the Journal report as a “six month old story.”

So what is true? Consider the following:

Like almost everything else in more than three decades of ugly exchanges between Washington and Tehran, it dates back to the Iranian revolution. When the Shah of Iran, Mohammad Reza Pahlavi, was still in power, the United States entered into a $ 400 million arms deal with Iran. But Washington halted the delivery of arms after the Shah’s overthrow in 1979. The new Islamist government was holding American hostages and cries of “death to America” ​​filled the streets.

The United States never returned the money and the case went to an international legal tribunal. Officials in Washington were eager to eliminate the problem as a relationship irritant, and most understood that the United States would eventually have to pay. The only question was how many (some officials feared a damaging court ruling) and how not to give the impression that the United States was funding Iran’s malicious activities.

The Journal reported Thursday that senior Justice Department officials opposed the cash payment, saying it would be considered ransom. They were rejected, according to the newspaper, by their State Department counterparts.

Attorney General Loretta E. Lynch alluded to these concerns in January. She told CNN that during the secret deliberations, “it was our responsibility to raise every issue and debate every point so that we can actually have the best possible process.”

A Justice Department official, speaking on condition of anonymity on Thursday, said anything about the officials had never reached the level of a formal objection from the Justice Department. “It’s not our job to influence delivery methods,” said the manager. And in a statement Thursday, the ministry made it clear that it supports the final decision.

US sanctions have blocked Iran from much of the international financial and banking system for decades. Few banks, including in Europe, were prepared in January to risk being accused of violating sanctions by facilitating the payment of $ 400 million.

U.S. officials say the only option was to wire the first installment to European banks and withdraw the money for delivery. White House officials declined to say whether the remainder of the $ 1.7 billion payment (including $ 1.3 billion in interest) was also made in cash.

Secretary of State John Kerry said the administration wanted to sort out the old contentious issues while the nuclear deal was put in place. President Obama said in January that the settlement was “well below the amount requested by Iran”, putting the best face to the negotiations.

“There was no advantage for the United States to drag this out,” he said.

Administration officials insist it did not, and Mr. Obama said on Thursday that the United States never pays a ransom. Officials attributed the breakdown in the conflict between the prisoners to the climate of diplomacy they had cultivated through the nuclear negotiations. “We have always said that it was independent of the nuclear negotiations but of great importance to us,” said a senior administration official, speaking on condition of anonymity, of the talks with the ‘Iran.

Critics say it couldn’t be a coincidence. Representative Kevin McCarthy of California, the House Majority Leader, said Wednesday: “It sounds a lot like ransom payment to me. Iran agrees, describing the payment as consideration for the release of the prisoners.

It seems unlikely that the simultaneous timing of the two events is a coincidence. But it often happens in diplomacy – two agreements that are “separate” for the purposes of one nation’s policy are linked for the benefit of another.

Republicans have gone from an attack on the nuclear deal to an attack on Ms. Clinton. They hope the accusation of exchanging “bushels of money” for American prisoners will make her appear weak in the face of a country that supports terrorism.

Mr. Trump has made the issue a central part of his foundational speech. In his first Twitter post on the matter, he wrote that “our incompetent Secretary of State, Hillary Clinton, was the one who started talks to give Iran $ 400 million in cash. Scandal!”

But given the whirlwind of other issues in this one-of-a-kind presidential campaign, it is by no means certain that Republicans will make the ransom argument stand – despite the #PalletsOfCash.

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