State dept. defends limited release of Iranian funds for prisoners

Under the deal struck last month, Iran moved the five Americans from prison to house arrest and will allow them to return to the United States when the money is fully transferred.

The State Department on Tuesday defended its progress toward completing a prisoner deal with Iran under which the United States is freeing $6 billion in frozen Iranian funds for humanitarian purposes in exchange for the release of five Americans held in Tehran.

Secretary of State Antony Blinken signed waivers on Friday allowing the Iranian money, which has been stored in South Korean accounts, to be transferred to accounts in Qatar without running afoul of US sanctions against Iran. The money will be subject to US government oversight to ensure that Iran uses it only for humanitarian purchases such as medicine and food.

Under the deal struck last month and previously reported by The New York Times, Iran moved the five Americans from prison to house arrest and will allow them to return to the United States when the money is fully transferred. The Biden administration has also approved the release of five Iranians imprisoned in the United States.

The deal could be complete as soon as next week. Blinken formally notified Congress of the waivers on Monday.

The agreement has drawn sharp criticism from Republicans who say that the Biden administration is paying far too high a price for the release of the Americans. Republicans also say that even if the money is closely monitored, its use for humanitarian needs will bolster the country’s clerical government and free up funds for nefarious purposes.

In a statement on Monday, Rep. Michael McCaul, R-Texas, the chair of the House Foreign Affairs Committee, bemoaned the transfer of funds to "the world’s top state sponsor of terrorism." Florida Gov. Ron DeSantis, a Republican candidate for president, posted on social media that the agreement "bankrolls nuclear ambitions, hostage takers, and extremists who hate America." And Sen. Ted Cruz, R-Texas, blasted what he called President Joe Biden’s "ransom" payment to Iran.

At a daily news briefing, State Department spokesperson Matthew Miller strongly rebutted such criticism after confirming an Associated Press report that Blinken had signed waivers on Friday allowing the transfer of money from South Korean accounts to Qatar, which has agreed to provide what amounts to an escrow service.

Miller said many critics had falsely claimed that the Biden administration was sending US taxpayer money to Tehran. The funds were in fact the proceeds of Iranian oil sales to South Korea. The United States condoned the purchases under exceptions to US economic sanctions granted to countries that agreed to import less Iranian oil and to place the money owed to Iran in restricted accounts.

"It is Iran’s money," Miller said. "So, there are people who claim that we are giving money, and we cannot give something that is not ours."

Miller also took aim at administration critics who argue that giving Iran access to $6 billion is too great a reward for the release of several American prisoners. McCaul complained that the deal "creates a direct incentive for America’s adversaries to conduct future hostage taking."

"Iran is not going to release these American citizens out of the goodness of their heart," Miller said. "That is not real life. We have to make tough choices and engage in tough negotiations to bring these American citizens home." He said the Americans were jailed "under brutal conditions, one of them for more than eight years."

In an interview aired by NBC News on Tuesday, Iran’s President Ebrahim Raisi, seemed to reject the notion that the funds would be restricted, saying his government would spend the money "wherever we need it."

Asked about those remarks, Miller implied they were for domestic political purposes, saying that he understood why Raisi "may need to make those remarks." But he said that the money would be held in Qatar "under strict oversight" by the Treasury Department and warned that the United States could freeze the funds again should Iran violate the terms of the deal.

The agreement is a de-escalation in tensions between the United States and Iran, which had soared in recent years after then-President Donald Trump unilaterally abandoned the 2015 Iran nuclear deal and Tehran subsequently accelerated its nuclear program, taking major strides toward bomb-making capability. Iran maintains that its program is for peaceful purposes and denies it is pursuing a bomb.

Experts say that Iran appears to have slowed the pace of its nuclear program, partly in response to warnings from the Biden administration that it was nearing a threshold for a dramatic US response.