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The Dangers of Ransom Payments to Iran Hearing FUELING TERROR: THE DANGERS OF RANSOM PAYMENTS TO IRAN HEARING BEFORE THE SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS OF THE COMMITTEE ON FINANCIAL SERVICES U.S. HOUSE OF REPRESENTATIVES ONE HUNDRED FOURTEENTH CONGRESS SECOND SESSION SEPTEMBER 8, 2016 Printed for the use of the Committee on Financial Services Serial No. 114–100 ( U.S. GOVERNMENT PUBLISHING OFFICE 25–944 PDF WASHINGTON : 2018 For sale by the Superintendent of Documents, U.S. Government Publishing Office Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800 Fax: (202) 512–2104 Mail: Stop IDCC, Washington, DC 20402–0001 VerDate Nov 24 2008 21:22 Mar 08, 2018 Jkt 025944 PO 00000 Frm 00001 Fmt 5011 Sfmt 5011 K:\DOCS\25944.TXT TERI HOUSE COMMITTEE ON FINANCIAL SERVICES JEB HENSARLING, Texas, Chairman PATRICK T. MCHENRY, North Carolina, MAXINE WATERS, California, Ranking Vice Chairman Member PETER T. KING, New York CAROLYN B. MALONEY, New York EDWARD R. ROYCE, California NYDIA M. VELA´ ZQUEZ, New York FRANK D. LUCAS, Oklahoma BRAD SHERMAN, California SCOTT GARRETT, New Jersey GREGORY W. MEEKS, New York RANDY NEUGEBAUER, Texas MICHAEL E. CAPUANO, Massachusetts STEVAN PEARCE, New Mexico RUBE´ N HINOJOSA, Texas BILL POSEY, Florida WM. LACY CLAY, Missouri MICHAEL G. FITZPATRICK, Pennsylvania STEPHEN F. LYNCH, Massachusetts LYNN A. WESTMORELAND, Georgia DAVID SCOTT, Georgia BLAINE LUETKEMEYER, Missouri AL GREEN, Texas BILL HUIZENGA, Michigan EMANUEL CLEAVER, Missouri SEAN P. DUFFY, Wisconsin GWEN MOORE, Wisconsin ROBERT HURT, Virginia KEITH ELLISON, Minnesota STEVE STIVERS, Ohio ED PERLMUTTER, Colorado STEPHEN LEE FINCHER, Tennessee JAMES A. HIMES, Connecticut MARLIN A. STUTZMAN, Indiana JOHN C. CARNEY, JR., Delaware MICK MULVANEY, South Carolina TERRI A. SEWELL, Alabama RANDY HULTGREN, Illinois BILL FOSTER, Illinois DENNIS A. ROSS, Florida DANIEL T. KILDEE, Michigan ROBERT PITTENGER, North Carolina PATRICK MURPHY, Florida ANN WAGNER, Missouri JOHN K. DELANEY, Maryland ANDY BARR, Kentucky KYRSTEN SINEMA, Arizona KEITH J. ROTHFUS, Pennsylvania JOYCE BEATTY, Ohio LUKE MESSER, Indiana DENNY HECK, Washington DAVID SCHWEIKERT, Arizona JUAN VARGAS, California FRANK GUINTA, New Hampshire SCOTT TIPTON, Colorado ROGER WILLIAMS, Texas BRUCE POLIQUIN, Maine MIA LOVE, Utah FRENCH HILL, Arkansas TOM EMMER, Minnesota SHANNON MCGAHN, Staff Director JAMES H. CLINGER, Chief Counsel (II) VerDate Nov 24 2008 21:22 Mar 08, 2018 Jkt 025944 PO 00000 Frm 00002 Fmt 5904 Sfmt 5904 K:\DOCS\25944.TXT TERI SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS SEAN P. DUFFY, Wisconsin, Chairman MICHAEL G. FITZPATRICK, Pennsylvania, AL GREEN, Texas, Ranking Member Vice Chairman MICHAEL E. CAPUANO, Massachusetts PETER T. KING, New York EMANUEL CLEAVER, Missouri PATRICK T. MCHENRY, North Carolina KEITH ELLISON, Minnesota ROBERT HURT, Virginia JOHN K. DELANEY, Maryland STEPHEN LEE FINCHER, Tennessee JOYCE BEATTY, Ohio MICK MULVANEY, South Carolina DENNY HECK, Washington RANDY HULTGREN, Illinois KYRSTEN SINEMA, Arizona ANN WAGNER, Missouri JUAN VARGAS, California SCOTT TIPTON, Colorado BRUCE POLIQUIN, Maine FRENCH HILL, Arkansas (III) VerDate Nov 24 2008 21:22 Mar 08, 2018 Jkt 025944 PO 00000 Frm 00003 Fmt 5904 Sfmt 5904 K:\DOCS\25944.TXT TERI VerDate Nov 24 2008 21:22 Mar 08, 2018 Jkt 025944 PO 00000 Frm 00004 Fmt 5904 Sfmt 5904 K:\DOCS\25944.TXT TERI C O N T E N T S Page Hearing held on: September 8, 2016 ............................................................................................ 1 Appendix: September 8, 2016 ............................................................................................ 73 WITNESSES THURSDAY, SEPTEMBER 8, 2016 Ahern, Paul, Assistant General Counsel, Enforcement and Intelligence, U.S. Department of the Treasury ................................................................................ 11 Backemeyer, Christopher, Deputy Assistant Secretary for Iran, U.S. Depart- ment of State ........................................................................................................ 5 Dubowitz, Mark, Executive Director, Foundation for Defense of Democracies .. 54 Grosh, Lisa, Assistant Legal Advisor, Office of International Claims and Investment Disputes, U.S. Department of State ............................................... 7 Lorber, Eric B., Senior Associate, Financial Integrity Network .......................... 57 Maloney, Suzanne, Deputy Director, Foreign Policy, and Senior Fellow, Cen- ter for Middle East Policy, the Brookings Institution ....................................... 59 McCord, Mary, Principal Deputy Assistant Attorney General for National Security, U.S. Department of Justice ................................................................. 10 Rubin, Michael, Resident Scholar, American Enterprise Institute ..................... 56 APPENDIX Prepared statements: Ahern, Paul ....................................................................................................... 74 Backemeyer, Christopher ................................................................................. 76 Dubowitz, Mark ................................................................................................ 80 Grosh, Lisa ........................................................................................................ 98 Lorber, Eric B. .................................................................................................. 102 Maloney, Suzanne ............................................................................................ 118 McCord, Mary ................................................................................................... 124 Rubin, Michael .................................................................................................. 126 ADDITIONAL MATERIAL SUBMITTED FOR THE RECORD Hill, Hon. French: Written responses to questions for the record submitted to Lisa Grosh and Chris Backemeyer ................................................................................. 135 (V) VerDate Nov 24 2008 21:22 Mar 08, 2018 Jkt 025944 PO 00000 Frm 00005 Fmt 5904 Sfmt 5904 K:\DOCS\25944.TXT TERI VerDate Nov 24 2008 21:22 Mar 08, 2018 Jkt 025944 PO 00000 Frm 00006 Fmt 5904 Sfmt 5904 K:\DOCS\25944.TXT TERI FUELING TERROR: THE DANGERS OF RANSOM PAYMENTS TO IRAN Thursday, September 8, 2016 U.S. HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS, COMMITTEE ON FINANCIAL SERVICES, Washington, D.C. The subcommittee met, pursuant to notice, at 10:02 a.m., in room 2128, Rayburn House Office Building, Hon. Sean P. Duffy [chair- man of the subcommittee] presiding. Members present: Representatives Duffy, Fitzpatrick, Mulvaney, Hultgren, Wagner, Tipton, Poliquin, Hill; Green, Capuano, Cleaver, Ellison, Delaney, Beatty, Heck, and Vargas. Ex officio present: Representatives Hensarling and Waters. Also present: Representatives Royce, Pittenger, Guinta, and Kil- dee. Chairman DUFFY. The Subcommittee on Oversight and Inves- tigations will come to order. Today’s hearing is entitled, ‘‘Fueling Terror: The Dangers of Ran- som Payments to Iran.’’ Without objection, the Chair is authorized to declare a recess of the subcommittee at any time. Also, without objection, members of the full Financial Services Committee who are not members of this subcommittee may partici- pate in today’s hearing for the purposes of making an opening statement and questioning the witnesses. The Chair now recognizes himself for 21⁄2 minutes for an opening statement. Today’s hearing will examine the Obama Administration’s $1.7 billion cash payment to Iran to settle longstanding claims pre- dating the Iran revolution. While the settlement was disclosed in January, new details about the payments surfaced in August when The Wall Street Journal reported that $400 million of that pay- ment was converted into Swiss francs and euros and then flown to Iran in cash on the same day that five American detainees were released from the Islamic Republic. On Tuesday Administration officials were forced to admit that the remaining $1.3 billion it paid to Iran in interest was also hand- ed over in cold, hard cash. Despite vigorous denials that there was any link between the payment and the release of American pris- oners, the evidence presented by the Administration makes it dif- ficult to believe. (1) VerDate Nov 24 2008 21:22 Mar 08, 2018 Jkt 025944 PO 00000 Frm 00007 Fmt 6633 Sfmt 6633 K:\DOCS\25944.TXT TERI 2 Iran officials certainly believe that this was a ransom payment. A Revolutionary Guard commander said on state media that, ‘‘Tak- ing this much money back was in return for the release of the Americans,’’ period, end quote. And one of the prisoners, Pastor Saeed Abedini, recalled that while waiting to be freed Iran police told him that, ‘‘We are waiting for another plane. So if the plane doesn’t come we never let you go.’’ Sounds like ransom to me. In an effort to corroborate the Administration’s claims, this com- mittee requested records about the payment from Treasury and the Department of Justice more than a month ago. And to date, the self-proclaimed most transparent Administration in our history has failed to provide any—not one document—to this committee. And the witnesses here today only agreed to appear under threat of subpoena. With jurisdiction over terror financing, this committee has a right and a responsibility to understand the facts surrounding this peculiar payment. While there is much that we don’t know, we can be sure that Iran is committed to its support for terrorist groups like Hezbollah, the enemy
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