Last week we reported the Associated Press discover a secret Obama administration plan to provide Iran with another wave of sanctions relief above and beyond those required by the P5+1 nuclear deal  (simply  because the Iranians are demanding the extra gift). The new administration capitulation goes  way beyond the nuclear-related Iran sanctions relief granted as part of the summer deal, and break promises made to members of congress, namely giving Iran access to U.S. financial markets and the dollar.

That secret plans have been confirmed in a Thursday report by the AP’s Matt Lee and Bradley Klapper.

The revelations in the AP story include:

  • The new sanctions relief is a gift that isn’t required by the nuclear deal. It’s just the Obama administration giving Iran a new concession, even after months of Iran launching missiles, abducting American civilians and sailors, escalating their threats to eradicate Israel, bolstering Assad, etc. The AP quotes Mark Dubowitz – executive director at the Foundation for Defense of Democracies – exactly on this point:

Dubowitz… said the administration’s currency argument was “a bait and switch which ignores a long-standing administration commitment not to greenlight Iran’s access to the greenback… This is above and beyond what is required by the nuclear deal,” he argued.

  • Giving Iran access to the U.S. financial system very specifically violates the administration’s pledge to Congress and shared with journalists while selling the nuclear deal last year. That pledge was to never to allow Iran that access:

Several restrictions would apply, but such a license would reverse a ban that has been in place for several years and one the administration had vowed to maintain while defending last year’s nuclear deal to skeptical U.S. lawmakers and the public.

  • From a big picture point of view,  giving Iran non-nuclear sanctions relief is the opposite of what the administration promised it would do in exchange for votes to approve the deal.  The administration promised to “double down” on non-nuclear pressure, not unwind it:

Members of Congress are crying foul. The 2012 National Defense Authorization Act instructs the president to “block and prohibit” all Iranian assets if they “come within the United States, or are or come within the possession or control of a United States person.” In a letter to Lew on Wednesday, Republican Sens. Marco Rubio and Mark Kirk said any Iranian access to dollars “would benefit Iran’s financiers of international terrorism, human rights abuses and ballistic missile threats.”

The administration tried to head off this story a few days ago, they floated an argument about “sanctions overreach,” in which they claimed that global corporations will abandon the U.S. market for the Iranian market if Washington doesn’t give Iran more sanctions relief . That argument is not getting much traction, partially because it’s a terrible argument, and partially because it’s not true:

Iran deal validators are already changing their pitch. Now they are arguing that Obama has to gift Iran more relief to bolster the Rouhani government. That pretext may also fail to convince lawmakers, who were told by the administration that the deal was very limited and aimed solely at resolving the nuclear issue, which any Iranian government would have to abide by under the threat of sanctions snapback.

Of course those sanctions snapbacks have been rendered useless by the Obama administration. President Obama gave Europe, China and Russia guarantees that their companies who make deals with Iran, would not have to stop working with Iran should sanctions need to be re-imposed due to of a violation of  the P5+1 deal.

The Obama administration will likely justify the latest concession by claiming that letting Iran trade in dollars helps them monitor the deal and gives the U.S. leverage to enforce it. But in a recent WSJ article Mark Dubowitz referenced above and his colleague Jonathan Schanzer, destroy those arguments. The biggest reason comes from the Treasury Department which long ago decided the cost of giving Iran access to the U.S. financial system outweighed the intelligence benefits.

Besides monitoring will be of little use.  The Iranians aren’t stupid; they won’t directly use their dollars for their nefarious purposes because they know we’d be looking at them– but will instead use the newfound credibility that dollar access gives their banks for those purposes. The U.S. won’t gain any new leverage because Iran will keep their dollars where the US can’t get them. In fact the administration argument on leverage is backwards: Obama officials told Congress over the summer that access to the dollar was being withheld specifically to provide the U.S. with leverage over non-nuclear activities – ballistic missiles, terrorism, human rights, etc – so “why throw away that leverage in exchange for no new concessions?”

There’s more to learn about the Administration’s plans in Thursday’s AP report, I recommend you read the full article by clicking here.