Obama administration allows earthquake relief money for Iran

The Obama administration decided Tuesday to allow Americans to send hundreds of thousands of dollars in cash to Iran to help with earthquake relief in a rare relief of tight financial sanctions imposed on the country in response to its controversial nuclear program.

The Treasury Department issued a 45-day general license to allow officially registered NGOs to send up to $300,000 to Iran for humanitarian relief and reconstruction activities related to two Aug. 11 earthquakes that struck northern Iran and killed more than 250 people. Food and medicine aid is already exempted from sanctions against Iran. The George W. Bush administration took a similar action in 2003.

Deputy National Security Advisor Denis McDonough explained on the White House blog that the Iranian government had refused to accept offers of official help for earthquake victims from the U.S. government, so the administration decided this was the best way to facilitate aid to the disaster area.

"In a disappointing decision, the government of Iran has chosen not to accept our offer of humanitarian assistance," he wrote. "This step allows the American people to support organizations providing humanitarian relief activities, including the distribution of emergency medical and shelter supplies, as well as those pursuing broader efforts to rebuild affected areas."

McDonough emphasized that the move was a temporary one and does not alter the administration’s approach to sanctioning Iran writ large.

"We remain committed to rigorously implementing the measures and sanctions in place to increase the pressure on the Iranian regime, and to continue increasing the costs of Iran’s non-compliance with its international obligations related to its nuclear program," he said.

Iran watchers have noted the delay in issuing the license, which came 10 days after the earthquake. When the Bush administration took a similar action, it did so just 4 days after the 2003 Bam disaster. Sources close to the administration told The Cable that there was significant debate about whether or not to issue the license.

State Department officials argued in favor of granting the license, while the White House resisted the move, worried about how even a temporary and limited relief of sanctions against Iran would play in the media so close to the presidential election. Eventually, with the support of top State Department officials, the White House was persuaded to agree to the move, these sources said.

The National Iranian American Council, a group representing Iranian-Americans, was also heavily involved in pushing for the issuance of the license. NIAC founder and president Trita Parsi told The Cable that his organization mobilized parts of the Iranian-American community, which sent more than 3,000 letters to the White House asking officials to allow more earthquake relief.

"Last time Bush did it, the U.S. won a tremendous amount of goodwill. And every time humanity trumps politics, the entity that takes the initiative wins a lot of soft power and political capital," Parsi said.

The obstacles facing NGOs who want to send cash to Iran are daunting, Parsi cautioned. He said that NIAC contacted 15 banks about wiring the money into Iran and 14 of them resisted the idea because working with Iranian banks is too risky, even when dealing with transactions that are exempted by sanctions.

"From their perspective, it’s not worth the risk," he said. "We hope the banks will take note of this and start doing things that are permissible, because otherwise this general license may have no effect at all."

There is also some concern, including on Capitol Hill, as to whether the money sent to Iran might somehow find its way into the wrong hands. "While all Americans support the Iranian people in this time of distress, we need to make sure assistance sent to Iran is not diverted or misused by the Iranian government," a senior Senate aide said. "When you allow cash transfers rather than monetizing aid, that’s a recipe for disaster."

Parsi said the best way to prevent the money from getting into Iranian government hands is to work through respected NGOs that are based in the United States and have a presence in Iran.

There are some checks on the aid, Treasury officials say.

"The license specifically forbids any dealings with entities on the OFAC SDN list such as the IRGC," Treasury Department spokesman John Sullivan told The Cable, referring to the Iranian Revolutionary Guard Corps. "There is also a mandated report to the Treasury and State Departments so we can make sure the money does not end up in the wrong hands."