06 June 2018•Update: 11 June 2018
By Michael Hernandez
WASHINGTON
The Obama administration sought to allow Iran access, however brief, to the U.S. financial system following the 2015 nuclear deal despite public assurances it would refrain from doing so, a Republican-led Senate investigation said Wednesday.
The majority report of the Senate’s Permanent Subcommittee on Investigations said the Treasury Department issued a specific license on Feb. 24, 2016 to an Omani bank allowing it to convert $5.7 billion in funds it was holding for Iran into euros.
The funds were held in Omani rials, and because the rial is pegged to the dollar the most effective way to convert the funds was first to change them into dollars, which would have allowed Iran brief access to the U.S. financial system, according to the committee's report.
Without the license issued by the Treasury the proposed exchange would have run afoul of U.S. sanctions. It was ultimately unsuccessful because no U.S. bank would participate in the exchange. Two unnamed banks declined to participate, leaving Bank Muscat unable to convert the funds.
Treasury and State Department officials planned other alternatives to free up the funds, including coordinating with the Federal Reserve Bank of New York, but did not follow through, the report said.
The findings are at odds with statements from senior Obama White House, State Department and Treasury Department officials who repeatedly said Iran would continue to lack access to the U.S. financial and commercial markets following the implementation of the Iran deal, also known as the Joint Comprehensive Plan of Action (JCPOA).
In July 2015 then-Treasury Secretary Jack Lew told lawmakers Iran "will continue to be denied access to the world's largest financial and commercial market,” referring to the U.S.
His comments and those of other top Obama administration officials drew the ire of the committee's Republican chairman.
"The Obama administration misled the American people and Congress because they were desperate to get a deal with Iran," Chairman Rob Porter said in a statement. "Despite claims both before and after the Iran deal was completed that the U.S. financial system would remain off limits, the Obama administration issued a specific license allowing Iran to convert billions of dollars in assets using the U.S. financial system."
But the committee's ranking Democrat, Tom Carper, said in a statement that "the Obama administration followed the law and worked to ensure the U.S. upheld our international commitments to the historic Iran deal, which stopped Iran from developing nuclear weapons. That’s what leaders do,” according to the Washington Post.
Carper further took umbrage with President Donald Trump's decision to unilaterally withdraw the U.S. from the JCPOA despite protest from close U.S. allies in Europe, saying: "President Trump has abandoned our allies, put our national security at risk and weakened our standing in the world.”
