Somehow it’s never been put to the Pinocchio Test. But if the president is going to keep getting this wrong, it’s time to give this falsehood a Pinocchio rating.
There are two numbers that Trump loves to reference when discussing the international nuclear agreement negotiated with Iran when Obama was president: $150 billion and $1.7 billion. The latter was a cash transaction, said to be the settlement of a long-standing Iranian claim against the United States, with interest, that was curiously timed to arrive when Iran released four detained Americans. (We discussed this payment at length in this fact check.)
Trump might have grounds to complain about the circumstances of the $1.7 billion cash transaction. But he’s all wet about the $150 billion claim, especially when he suggests it was taxpayer money. That’s certainly what he did in this tweet, asking why Democrats will not agree to appropriate $5 billion for a wall on the southern border with Mexico when they “gave Iran 150 Billion Dollars.”
But unlike the cash deal, this was not U.S. money. It was Iran’s money, frozen in international financial institutions around the world because of sanctions intended to curb Iran’s nuclear ambitions. For instance, many of the funds were held in banks in Asia, including China and India, as well as Turkey. Many of the countries received waivers to buy Iranian oil and gas during the sanctions but placed the payments in escrow-style accounts that remained off-limits to Iran. The Islamic Republic also transferred assets to Asian banks from Europe in anticipation of financial sanctions.
On top of that, Trump’s repeated use of the $150 billion figure is off-base. That was an upper-range estimate, but the Treasury Department said much of it was not liquid. Once Iran fulfills other obligations, it would have about $55 billion left, Treasury said.
“Estimates of total Central Bank of Iran (CBI) foreign exchange assets worldwide are in the range of $100 [billion] to $125 billion,” Adam J. Szubin, acting Treasury undersecretary for terrorism and financial intelligence, told Congress in 2015. “Our assessment is that Iran’s usable liquid assets after sanctions relief will be much lower, at a little more than $50 billion. The other $50-70 billion of total CBI foreign exchange assets are either obligated in illiquid projects (such as over 50 projects with China) that cannot be monetized quickly, if at all, or are composed of outstanding loans to Iranian entities that cannot repay them. These assets would not become accessible following sanctions relief.”
For its part, the Central Bank of Iran said the number was actually $32 billion, not $55 billion.
Nader Habibi, a professor of economics at Brandeis University’s Crown Center for Middle East Studies, did his own calculation of Iran’s frozen assets in 2015. He noted that $10 billion was in Iraqi banks and could not be recovered quickly and that nearly $25 billion was deposited in Chinese banks as collateral for several Chinese investments in Iran. He estimated that only about $29 billion would be available to Iran for immediate use. In context of Iran’s oil revenue, he wrote, “$29 billion of released funds doesn’t amount to that much and represents only half of Iran’s current oil export revenue.”
(Habibi said in an email: “I have not come across any new information since I wrote that piece in 2015 to change my assessment.”)
We should note that Trump said Obama “got nothing” in exchange for lifting sanctions as part of the nuclear agreement. Perhaps that’s a matter of opinion, but experts said that Iran was generally in compliance with the agreement when Trump decided to terminate it.
The Pinocchio Test
Trump’s use of the $150 billion continues to be problematic. That was a high-end estimate, and the actual number available to Iran appears to have been between $25 billion and $50 billion.
But even more troubling, Trump suggests this was taxpayer money. In the tweet, he explicitly compared it to a congressional appropriation. That’s just flat wrong — and worthy of Four Pinocchios.
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