Defense

State Department defends $1.7 billion settlement with Iran

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A State Department official defended a $1.7 billion settlement with Iran in a recent letter to a congressman, calling it a necessary step in wrapping up a decades-long legal dispute that had the potential to cost billions more if it worked its way through international courts. 

{mosads}The settlement keeps Iran from securing much more costly damages and a high interest rate in a Hague Tribunal on a deal that soured more than 25 years ago, wrote Julia Frifield, assistant secretary of State for legislative affairs, in a letter to Rep. Mike Pompeo (R-Kan.) released by Pompeo’s office Wednesday. 

Pompeo and other Republican lawmakers have been questioning the timing of the settlement, calling it a ransom payment because it coincided with Iran’s release of five American prisoners in January.

“The timing was particularly critical, as hearings on this claim were then being considered for scheduling by the tribunal,” Frifield wrote.

The settlement relates to an arms deal between Iran and the United States that fell apart after the Iranian Revolution in 1979.

Iran had been seeking money from a trust fund related to the deal, as well as interest for more than 35 years, according to the letter.

In June 2014, Iran raised the issue of bringing its claims to the Iran-U.S. Claims Tribunal at The Hague, which was set up after the Iran hostage crisis.

In addition to the trust fund claim, Iran also wanted architectural drawings and fossils from the U.S. The United States also settled those claims, Frifield wrote, with the drawings going to the Tehran Museum of Contemporary Art and the fossils to Iran’s Ministry of the Environment. 

The White House has previously said Iran was pushing for $7 billion or $8 billion for the trust fund claim.

The settlement payment reached was a combination of $400 million in the trust fund and $1.3 billion in interest.

“If Iran’s claim for the trust fund balance and interest had gone to decision in the tribunal, the United States could well have faced significant exposure in the billions of dollars,” Frifield wrote. “Iran was of course seeking very high rates of interest for a period over three decades. We were able to secure a favorable resolution on the interest owed to Iran and avoid a much larger tribunal award against us, saving the U.S. taxpayers a significant amount of money.” 

Iran still has some large claims against the United States, while the United States has a “significant” counterclaim against Iran, Frifield added.

“The United States is continuing to vigorously litigate these claims at the tribunal, but is also open to discussing further settlements of claims with Iran, as we have done throughout the life of the tribunal, with the aim of resolving them in furtherance of U.S. interests,” she wrote.

Pompeo slammed Frifield’s response, saying it shows the administration secretly negotiated with Iran and skirts the question of the payment’s relation to Iran releasing American prisoners.

“After nearly two months of stalling, the State Department confirmed what I feared was true: the Obama administration is negotiating behind closed doors with the Islamic Republic of Iran and using taxpayer dollars to pay the regime,” he said in a written statement. “Worse yet, more of these payments are likely coming.

“Secretary Kerry still refuses to answer whether the $1.7 billion U.S. payment to Iran was related to the release of American hostages held by Iran. While we celebrate the return of these hostages, this administration could be setting a dangerous precedent, as innocent Americans continue to be held in Iran and around the world. I will not stop until we have all of the answers and will do all in my power to stop the Obama administration’s dangerous Iran policy.”

Tags Iran Julia Frifield Mike Pompeo

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