The surprise attack by Hamas against Israel on Saturday has put a focus on Iran. And this attention calls into question how much money the U.S. government has given Iran and whether those funds could have been used to stage the Hamas attack on Israel.
Iran reportedly now has access to $6 billion that was stuck in South Korean banks as part of an Iran-U.S. prisoner swap in September. Meanwhile, separately, on Sunday, Iran claimed to have received $43 million from the U.S. This money, analysts say, was not quite new as it was part of a fund for a tribunal formed to resolve trade and economic differences after the freeing of American hostages in Tehran in 1981.
The $6 billion accessed as part of the prisoner exchange has sparked criticism of the Biden administration, including from former President Donald Trump, that the money could have been used to support Hamas.
Analysts tell Newsweek that the $6 billion was Iranian money from its oil exports to South Korea.
Frozen assets were for humanitarian purposes
Patrick Clawson, a director of research at The Washington Institute for Near East Policy said after the Trump administration pulled the U.S. out of its nuclear control agreement with Iran, it sanctioned the use of American dollars for purchases of Iranian oil. But it instituted a phase-out period. And during that time, the oil export revenues from South Korea accumulated billions of dollars.
"It's not U.S. taxpayer money," he told Newsweek. "It's money that, quite clearly, is Iran's in one shape or another."
Under U.S. sanctions, Iran was allowed to use the $6 billion in frozen assets for humanitarian purposes, such as the purchase of medicine and medical equipment, said Ali Vaez, the International Crisis Group's Iran project director. Part of the reason Iran had been unable to spend the cash stuck in South Korea was due to the complexity of converting it to other currencies.
"All the U.S. has done is basically moved restricted assets that Iran had in South Korea to restricted asset and restricted accounts in Doha, through which Iran can only submit requests," Vaez told Newsweek.
Last month, the Biden administration said the money would only be available for humanitarian purchases from non-Iranian sources.
"No funds enter Iran ever, nor do any funds get paid to Iranian companies or entities," a senior administration official told reporters in September. "These funds will be available only for transactions for humanitarian goods with vetted third-party, non-Iranian vendors."
The transfer of the funds to the so-called "humanitarian channel in Qatar" will give the U.S. the ability to monitor its spending even more, Vaez said in an interview with Newsweek.
"The U.S. actually has oversight over every single order that Iran submits to," he said. "It can veto them. It can freeze the funds again. So, this is a deal that is 100 percent in the interest of the United States."
Clawson said one thing about the arrangement that could be an issue is the notion that money is fungible, meaning that Iran has more money to spend.
"If the Iranians use this money to import wheat, they're not using money from their current oil sales to import wheat, and so the Iranians have more money available to use for their purposes," Clawson said.
Vaez said that it was a mistake to reduce the conflict between Israel and Palestine to the amount of money Iran has in its bank account.
"This idea that what Iran does in terms of its regional policies is only and only a function of money is the most simplistic and reductionist analysis," Vaez told Newsweek. "It just just does not align with more than 40 years of Iran's track record in the region."
No evidence Iran involved in attack
A report by The Wall Street Journal over the weekend suggested that Iranian officials helped Hamas plan the attack. American and Iranian officials have said, however, that there is no evidence of Iranian involvement in the attack.
John Kirby, U.S. National Security Council coordinator for strategic communications, told reporters on Tuesday that "there's a degree of complicity here writ large" in the relationship between Hamas and Iran.
"That said, we haven't...and we are looking through the information streams. We haven't seen hard, tangible evidence that Iran was directly involved in participating in or resourcing and planning these sets of complex attacks that Hamas pulled off over the weekend," he said.
Attack took months to plan
Vaez said connecting Iran's access to the $6 billion to the attack by Hamas was flawed since it was evident that the operation took months to plan.
"Iran only gained access to these assets on September 18th, and so far, to our knowledge, has not really used them at all to purchase anything," Vaez said to Newsweek. "It can't even purchase anything that would help harm us in any way."
Biden administration officials have been adamant in arguing linking Iran's access to the $6 billion funds to the Hamas attack was mistaken.
"Let's be clear: the deal to bring U.S. citizens home from Iran has nothing to do with the horrific attack on Israel. Not a penny has been spent, and when it is, it can only go for humanitarian needs like food and medicine. Anything to the contrary is false," Matthew Miller, the State Department spokesperson, said on X, the platform formerly known as Twitter.
Brian Nelson, the Under Secretary for Terrorism and Financial Intelligence at the U.S. Department of Treasury, took to X on Saturday to say that none of the money has gone to Iran.
"All of the money held in restricted accounts in Doha as part of the arrangement to secure the release of 5 Americans in September remains in Doha. Not a penny has been spent," he wrote.
Asked on NBC's Meet The Press on Sunday, about the money is fungible criticism, U.S. Secretary of State Antony Blinken said this:
"Iran has, unfortunately, always used and focused its funds on supporting terrorism, on supporting groups like Hamas, and it's done that when there have been sanctions, it's done that there haven't been sanctions," he said. These funds have always been, under the law, available to Iran to use for humanitarian purposes. The Trump administration set up a very similar mechanism to enable Iran to use these kinds of assets for humanitarian purposes. We've done the same thing."
Newsweek has sought comment from the White House and the U.S. Treasury via email.
Uncommon Knowledge
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Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
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Omar Mohammed is a Newsweek reporter based in the Greater Boston area. His focus is reporting on the Economy and ... Read more
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