The time Trump told the truth
It is not exactly a state secret that President Trump is prone to exaggeration, if not outright distortion of any number of facts, as his Sept. 26 press conference at the U.N. General Assembly meeting amply demonstrated.
But in at least one instance, perhaps the only instance throughout the press conference, the man who described himself (quoting Chinese President Xi Jinping) as having a “very, very large brain” was essentially accurate: the contrast between the release of American hostages held by Iran and those released by North Korea.
{mosads}The president claimed that “I didn’t do what (President) Obama did, give $1.8 billion in cash to get back our hostages. I haven’t paid them anything. I haven’t paid them 10 cents” to obtain North Korea’s release in May 2018 of three Americans prior to Trump’s summit with Kim Jong Un.
It certainly is true that Trump did not pay “10 cents” or anything more for the release of the hostages. On the other hand, there has been considerable debate over whether the Obama administration paid tribute to Tehran to win the release of four Americans who had been imprisoned in Iran.
There is no disputing that a payment — not of $1.8 billion, but of $400 million (the president exaggerated the sum in question) — was transferred to Iran in January 2016. That was the very day that the ruling mullahs released the Americans. Nor is there any dispute over the fact that the monies were transferred in cash — in foreign currencies, no less. Finally, there is no denying that the Obama administration did not acknowledge the payment until early the following September, after the Wall Street Journal broke the story in August.
President Obama’s defenders argued that the release of the Americans actually was part of a prisoner exchange; seven Iranians imprisoned in the United States were granted their freedom. On the other hand, the Obama White House noted that the $400 million, like the total of $1.8 billion that ultimately was sent to Iran, had nothing to do with the hostage release but was part of a settlement over the unfreezing of Iranian assets that had been held by the United States since the 1979 hostage crisis.
These funds, Obama administration officials said, represented an advance payment that the government of the ousted shah of Iran had made for the acquisition of military equipment. In the aftermath of the 1979 hostage crisis, the United States blocked the sale but held on to the funds. The negotiations that led to the settlement had dragged on for years and, therefore, could not be linked to the 2016 hostage release.
Some Obama administration supporters also argued that, had the case been resolved in arbitration, the United States would have found itself liable to pay Iran as much as $10 billion rather than $1.8 billion.
The difficulty with the argument that Obama’s defenders put forward is that there is no evidence that the United States-Iran claims tribunal would have ruled in favor of granting Iran anything like $10 billion. That huge sum was simply Iran’s claim, based on a high interest rate; the actual principal amount in dispute was $400 million. Moreover, when it appeared that arbitration would result in a large American payment — although considerably less than $10 billion — the American side convinced the Iranians to negotiate rather than rely on the nine-judge arbitration panel. It was in that negotiation that the two sides agreed to an American payment of the initial $400 million that had been frozen, plus $1.3 billion in interest.
Why did the Iranians choose to leave arbitration if they were likely to receive a sum far greater than $1.7 billion? The Obama administration never addressed that question. No doubt the payment was due to the simultaneous completion of negotiations for the Joint Comprehensive Plan of Action (JCPOA), better known as the nuclear deal. Given the uncertainty of an arbitrated outcome, cash-strapped Iran opted for the money that it could expect to receive.
What is not entirely clear is when the Iranians were supposed to receive the initial tranche of funds, or how much that tranche should have been. Nor is it evident that, Obama administration assertions to the contrary, the American team negotiating the financial aspects of the nuclear deal was unaware of developments in the hostage talks. The state of the hostage negotiations was unlikely to have been a secret to any senior American official dealing with other matters relating to Iran, such as the financial aspects of the JCPOA.
Thus, the fact that monies were released before Iran did anything concrete in relation to implementing the nuclear deal, but on the day that American hostages were released, looks to be far more than mere “coincidence.” Though linked to the nuclear agreement, the size and timing of the payment certainly would seem to underscore the claim made by Iran’s Revolutionary Guard leadership — well before Donald Trump took office — that the payment also served as a “ransom.”
Perhaps the president, acting in character, overstated his case and got his sums wrong — but, at least in this instance, his basic argument cannot be easily dismissed.
Dov S. Zakheim is a senior adviser at the Center for Strategic and International Studies and vice chairman of the board for the Foreign Policy Research Institute. He was under secretary (comptroller) and chief financial officer for the Department of Defense from 2001 to 2004 and a deputy under secretary of Defense from 1985 to 1987.