WASHINGTON — The Biden administration is reserving the option to halt Iran’s access to $6 billion it is set to receive as part of a prisoner exchange deal the White House and Tehran reached last month, but so far, it sees no need to do so, according to three sources familiar with the discussions.
The White House has faced bipartisan pressure since Hamas attacked Israel to block Iran from accessing any of the $6 billion, particularly as the U.S. tries to assess whether Iran had any direct involvement in the attack.
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“These funds should remain frozen until we can determine whether Iran played a role in the attack and what the appropriate U.S. response should be,” Sen. Bob Casey, D-Pa., said in a statement Wednesday.
Sen. Tammy Baldwin, D-Wis., issued a similar statement, and Sens. Jon Tester, D-Mont., and Joe Manchin, D-W.Va., on Tuesday called for the U.S. to refreeze the assets.
Critics of the White House’s decision to give Iran access to the $6 billion argue that the money is fungible and that any funds Iran receives for humanitarian assistance frees up more money for it to spend on nefarious activities in the Middle East.
Administration officials, while suggesting that freezing the $6 billion is on the table, have not said what the trigger to do so would be or how the process would work. Refreezing the Iranian funds also could have an effect on the administration’s efforts to negotiate future deals for other wrongfully detained Americans abroad.
President Joe Biden’s national security adviser, Jake Sullivan, said that none of the $6 billion in unfrozen Iranian oil revenue has been spent, while he declined to say whether the administration would seek to refreeze it. Jon Finer, the deputy national security adviser, told Jewish leaders in a call Tuesday that, if necessary, “we have options available to us if it is not spent for the purpose to which it is restricted.”
Iran cannot directly access the funds on its own, according to U.S. officials, who stress that the money is sitting in a Qatari bank and is intended only for humanitarian use.
The officials insist there are already several safeguards to ensure the money is not misused, including monitoring by the U.S. Treasury Department and by the Qataris, as well. Any approved withdrawal for goods such as food, medicine and agricultural equipment would be monitored by both entities, officials said.
The funds had been held in a South Korean bank under a mechanism that allowed Iran to keep selling oil to South Korea and several other countries. U.S. sanctions had prohibited Iran from accessing the money.
“The funds in Qatar are subject to identical restrictions as the funds in South Korea and may only be used for the same types of humanitarian trade. Such transfers are consistent with our Iran sanctions, which include long-standing authorizations and exceptions for the provision of humanitarian goods and assistance to Iran,” one of the administration officials said.
Iranian President Ebrahim Raisi told NBC News' Lester Holt in an interview last month that his government would spend the money “wherever we need it.”
The U.S. has pledged to “take action” immediately if it notices Iran using the money for anything other than the stated humanitarian purposes, the official added.
The National Security Council spokesman, Adm. John Kirby, said Tuesday on MSNBC, “That money can be frozen at any time, we can stop any transaction.”
The U.S. government has accused Iran of funding and arming Hamas since the 1990s. So far, administration officials have said they have not found a “smoking gun” that directly links Iran to Saturday's attack in Israel.
Still, some congressional Democrats say the administration needs to hit pause. In the House, Reps. Chris Pappas, D-N.H., and Colin Allred, D-Texas, called on the Biden administration to refreeze the funds, as did the Blue Dog Coalition whose members are moderate Democrats.
“Money is fungible, and there is a well-documented history of Iran funding Hamas, Hezbollah and other terrorist organizations opposed to the existence of Israel,” the coalition said. “Doing what we can to prevent the financing of future acts of terrorism by a regime in Tehran whose leaders praised these attacks is the least we can do to ensure our ally Israel can defend itself.”
Separately, Senate Minority Leader Mitch McConnell, R-Ky., and Sen. Tom Cotton, R-Ark., introduced legislation Wednesday that would block Iran’s access to the funds.
Over the weekend, Biden administration officials pushed back against accusations from Republicans that the $6 billion had been used to fuel the attack by Hamas in Israel, saying Iran had not yet accessed any of the money.
“It’s very unfortunate that some are playing political at a time when so many lives have been lost,” Secretary of State Antony Blinken said Sunday. “These were not U.S. taxpayer dollars. These were Iranian resources that it had accumulated from the sale of its oil that were stuck in a bank in South Korea.”