Where’s the evidence we “owed” Iran the money we paid?

The Obama administrations and others wishing to defend the president’s decision to hand over $400 million in cash to Iran on Jan. 17 and $1.3 billion more in cash in two subsequent shipments insist that the payment was not a ransom. It was, instead, a payment of money the U.S. “owed” Iran, they say. Indeed, we got a bargain because the money settled a claim that was worth substantially more, given the interest we “owed.”

The notion that we owed Iran is based on the fact that Iran had a court claim against the U.S. But the court claim was contested, and a contested court claim is not a debt.

If the Obama administration believed that the U.S. owed Iran money, it should have paid the debt years ago. It didn’t. Not only did the U.S. contest Iran’s claim, we asserted counterclaims.

What the Obama administration is really saying is that the U.S. was destined to lose to Iran in court. But even if this were true, why not play out the proceedings?

Obama contends that Iran likely will moderate its behavior over the years thanks to the good will generated by the nuclear deal. If he actually believes this, why not wait a few years before giving them vast amount of money, some of which, in the regime’s present state of mind, almost surely will used to support the Assad regime and Hezbollah? And why give the money in cash?

To defend paying the money now, and in cash, it would have to be the case that the U.S. got a terrific discount against the amount it likely would have had to pay in the event of full litigation. Even then, I would find the payout disgraceful and against our interests. But at least Obama and his apologists could say that it made sense in cold financial terms.

But did the U.S. get a bargain financially? I have seen no analysis that supports this idea — only raw assertions by the administration which its apologists parrot.

Rick Richman reports that the administration has repeatedly refused to answer questions about the merits of Iran’s claim or the interest computation, even in response to inquiries by Congress:

On Feb. 3, Rep. Edward J. Royce (R-Calif.), chairman of the House Foreign Affairs Committee, requested “all legal analyses . . . evaluating the likelihood of Iran prevailing in this dispute” and a “detailed explanation of how the interest payment to Iran of $1.3 billion was calculated.”

Six weeks later, Assistant Secretary of State for Legislative Affairs Julia Frifield responded that the United States “could well have faced significant [additional] exposure in the billions of dollars,” because “Iran was of course seeking very high rates of interest,” and “we are confident that this was a good settlement for the American taxpayer.”

This isn’t “all legal analyses.” In fact, it isn’t any. It isn’t even actuarial analysis.

As noted, the U.S. has made claims against Iran. In addition to the counterclaims mentioned above, we had more than $400 million in claims, plus interest, arising under the Victims of Trafficking and Violence Protection Act. The VTVPA claims were apparently canceled out as part of Obama’s settlement of Iran’s claim, supposedly as an offset of interest we “owed” Iran (or so I gather from Richman’s piece).

But in the absence of legal and accounting analysis, which the administration has refused to provide, we simply don’t know whether, taking all of our claims into consideration, we “owed” Iran anything at all.

Before settling even relatively small court cases, competent lawyers perform a risk analysis. They consider, at a minimum, the likelihood of prevailing; the likelihood of a high-end, a medium-size, and a low-end monetary award; and the cost of trying the case.

If the Obama administration was, as it asserts, trying in good faith to settle court claims on terms financially favorable to the U.S., then it must have performed such an analysis. In that case, let it produce the analysis. If it can’t, then we are entitled to assume that the cash payments to Iran weren’t about making a good financial deal for the U.S.

It’s possible that there’s a settlement analysis that doesn’t support the full amount we paid Iran. In that case, the shortfall would tell us how much of the payment was in exchange for release of the hostages.


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