Treasury Official Grilled Over Iran Sanction Waivers at Senate Hearing

Sen. John Kennedy (R-La.) during a hearing on Capitol Hill in Washington on March 29, 2023. Kevin Dietsch/Getty Images

The White House is “quoting Socrates in the middle of a bar fight” as the current administration attempts to manage geopolitical strife in the Middle East and Central America while easing sanctions and issuing waivers to enemy regimes, says Sen. John Kennedy (R-La.).

Deputy Treasury Secretary Adewale Adeyemo appeared before the Senate Banking Committee to discuss his department’s efforts to fight illicit financing and terrorism and curb sanctions evasion.

Over the past year, the administration has come under fire for allowing adversarial governments to access funding that critics warn could be used for terrorist purposes or to crack down on domestic opposition leaders and political parties.

Mr. Adeyemo insisted that there are rules in place to ensure that the money is not dedicated to odious endeavors.

Last month, the Biden administration renewed a 120-day waiver allowing Iraq to avert sanctions to acquire Iran’s energy.

Baghdad depends on Iran for approximately one-third of its energy needs and owes its neighbor several billion dollars but has been unable to pay because of U.S. sanctions.

“Our goal is to make sure we take every action to prevent Iran from destabilizing activities in the region,” the Deputy Treasury Secretary explained.

“We will continue to go after Iran’s sale of oil and try to limit their ability at best we can with the tools you have given us.”

Mr. Adeyemo and other U.S. officials have asserted that the funds transferred to a bank in Qatar, for example, could only be used for specific objectives, including humanitarian reasons.

He told senators on April 9 that the federal government has not allowed a single dollar to flow from Qatar or the Iraqi Electricity Fund to the Iranian regime.

However, writing in a three-page letter to Treasury Secretary Janet Yellen and Secretary of State Antony Blinken, the GOP lawmakers warned that issuing a 120-day Iranian sanctions waiver could allow the regime to use the money to fund terrorist activities throughout the Middle East.

GOP lawmakers in the upper chamber warn that these electricity waivers allow the funds to be transferred outside Iraq and become denominated in euros.

“The United States should be restricting Iran’s access to currency abroad,” the senators wrote. “Instead, your administration is expanding it, all while continuing to share limited information on a strategy to restore deterrence in the Middle East with Congress or the American people.”

Senate Republicans have repeatedly rebuked the White House for approving the Iran sanctions waiver for Iraq, accusing President Joe Biden and his administration of employing a “strategy of appeasement” with Tehran.

‘Not Our Friend’

“The problem you guys have is that you want to quote Socrates in the middle of a bar fight,” Mr. Kennedy told the Treasury official.

“Iran is not our friend. Venezuela is not our friend. President Biden keeps giving them money to buy weapons to try to kill us.”

Following the deadly Oct. 7 terrorist attacks on Israel by Hamas, Sen. Tim Scott (R-S.C.) introduced the Revoke Iranian Funding Act, a bill that would permanently freeze $6 billion released by the Biden administration.

Additionally, Mr. Scott, a ranking member on the Senate Banking Committee, submitted the Solidify Iran Sanctions Act to permanently institute various sanctions to halt Tehran’s “malign activity, including the pursuit of nuclear weapons.”

This past fall, President Biden agreed to a deal that permitted $6 billion in frozen Iranian funds in South Korea to be transferred to Qatar.

In exchange, Tehran released five U.S. citizens.

In September, President Biden extended the temporary suspension of sanctions against Venezuela in exchange for free and fair elections.

The administration will have until Apr. 17 to determine if these sanctions will continue to be suspended or reimposed.

While Mr. Adeyemo did not say whether they will stay lifted, reports indicate that officials are unlikely to reimpose oil sanctions on Caracas.

Speaking to reporters in December, senior administration officials noted that sanctions relief negotiations have been ongoing with Venezuelan President Nicolas Maduro and his representatives.

“As the talks continue, we will continue to consider sanctions relief,” one official said.

“We’ve been very clear that the United States will calibrate our sanctions on the basis of concrete outcomes between Venezuelan parties. And our policy consistently has been to support a negotiated outcome that leads to competitive and inclusive elections.

“And that is the course that—that is the U.S. policy, and that’s the course that we will continue.”

Crude oil prices have soared about 20 percent year-to-date to nearly $90 a barrel.

A gallon of gasoline has surged 15 percent to around $3.60.

The rally in global energy markets has been fueled by geopolitical tensions and tighter worldwide supplies.

While the Treasury Department possesses the tools to prevent U.S. dollars from traveling the international economy that could bolster Iran’s power, Mr. Scott told the Treasury official that the administration “has reduced those barriers” through waivers.

“This is beyond troubling,” the former presidential candidate said.