President Obama's decision to send $400 million in cash to Iran "appears to violate" federal law banning the shipment "of any goods" to the regime, according to a pair of Republican senators.
Sen. Ted Cruz, R-Texas, and Sen. Mike Lee, R-Utah, want "a full accounting" of the decision to send $400 million in foreign currency to Iran. Obama's team has justified the shipment as the first installment in repaying $1.7 billion that the United States owes Iran from a transaction that predates the 1979 revolution, but Republicans believe it functioned as a ransom payment for the release of American hostages who were set free in conjunction with the shipment.
"Although the administration has denied there was any quid pro quo, the close temporal proximity of the payment to the release of the hostages suggests otherwise," the senators wrote. "As the Justice Department is never remiss to point out in court, an illicit quid pro quo can be inferred from the timing of the quid and the quo."
The senators take a different tack than some of their colleagues, however, by focusing on the laws that govern the shipment of money and "any [other] goods" to Iran. "While we are deeply concerned about the national security implications of the administration's cash-for-hostages scheme, especially in light of reports that Iran has already arrested additional Americans, the purpose of this letter is to inquire about the legality of the payment," they wrote.
Although they're asking questions, the letter is written like a prosecution. The lawmakers, both of whom worked as Supreme Court clerks, believe they have Obama caught in a dilemma: either the administration must admit that the payment violated the ban on sending money "directly or indirectly" to the regime, or they invoke an exemption to that ban, but also admit that the cash payment was required to secure the release of the hostages.
"If the transaction was explicitly permitted under another regulation — for instance, the regulation authorizing '[a]ll transactions necessary … to payments pursuant to settlement agreements entered into by the United States Government' — then why did the administration structure the transaction as a cash payment in non-United States currency?" the senators wrote. "That would have been entirely unnecessary."
Iranian officials wanted the $400 million delivered in cash, even though it was technically the first installment in the $1.7 billion settlement, "to show they had gained something tangible" in exchange for the prisoners, "U.S. officials" told the Wall Street Journal.