Eli Lake, whose credibility fell off a wall and shattered sometime around 2003 and still hasn’t been put back together, despite the best efforts of all the king’s horses and all the king’s men,
is very mad today because the United States is sending military aid to Iran (when we should be sending cruise missiles directly to downtown Tehran, amirite?). No, this isn’t like that time in the 1980s when Ronald Reagan illegally sold weapons to Iran because Israel wanted him to and so that he could use the proceeds to fund right-wing death squads in Central America. No, this time it’s Actually Bad! America is “inadvertently paying” for an increase in Iran’s military budget! Check it out:
It all starts with $1.7 billion the U.S. Treasury transferred to Iran’s Central Bank in January, during a delicate prisoner swap and the implementation of last summer’s nuclear deal to resolve a long-standing dispute about Iran’s arms purchases before the revolution of 1979.
For months it was unclear what Iran’s government would do with this money. But last month the mystery was solved when Iran’s Guardian Council approved the government’s 2017 budget that instructed Iran’s Central Bank to transfer the $1.7 billion to the military.
Oh damn, that’s incontrovertible right there! Sure, Iran’s total 2017 military budget, including the increase and going with Lake’s own figures, is about $19 billion, compared to somewhere just shy of $600 billion for the US, but…well, actually, that’s a really big difference. Anyway here’s the deal with that $1.7 billion: it’s not actually America’s money. Lake again:
Republicans and some Democrats who opposed Obama’s nuclear deal have argued that the end of some sanctions would help to fund Iran’s military. But at least that was Iran’s money already (albeit frozen in overseas bank accounts). The $1.7 billion that Treasury transferred to Iran in January is different.
A portion of it, $400 million, came from a trust fund comprising money paid by the government of Shah Mohammad Reza Pahlavi, a U.S. ally, for arms sold to Iran before the 1979 revolution. Those sales were cut off in 1979 after revolutionaries took over the U.S. Embassy in Tehran and held the American staff hostage for 444 days. The remaining $1.3 billion represents interest on the $400 million principle over more than 36 years.
You can probably already see the problem with Lake’s logic, but…you know what? It’s late, it’s Friday, so I’m going to farm this one out to Ali Gharib at LobeLog:
Perhaps Lake believes in a strict reading of sharia-compliant banking, where no interest can be charged (if so, Eli, I’d like to borrow some money). Barring that, however, it only makes sense that money wrongfully seized—that is, money that belonged to Iran—would be paid back with appropriate interest. This is an accepted norm for just about any interaction in modern society where one party holds another party’s money. Since the U.S. government, which is funded by the U.S. taxpayer, was holding Iran’s money, the U.S. government, and therefore the taxpayer, is responsible for paying the interest.
When it’s been 36 years, that interest adds up to a lot of extra dough. I used a simple compound interest calculator on the Internet and found that for a $400 million principal (which Lake has incorrectly rendered as “principle”), a rate of 4.11 percent would give you a total of $1.7 billion over 26 years. That doesn’t seem outrageously high. When Secretary of State John Kerry announced the settlement, he said, “Iran’s recovery was fixed at a reasonable rate of interest and therefore Iran is unable to pursue a bigger Tribunal award against us, preventing U.S. taxpayers from being obligated to a larger amount of money.”
There’s a word for taking somebody’s money in exchange for goods, not supplying the goods, and then refusing to pay it back (with interest, if enough time elapses): theft. I’m sure Lake sees nothing wrong with stealing Iran’s money, but I’d prefer that the United States uphold some principles (and here I’m using that spelling correctly, unlike Lake, if you noticed the word in bold above), one of them being that we don’t simply con other countries out of their money even when they’re Officially Bad.
There’s no way that Lake doesn’t understand this. He knows that the $1.7 billion in question is Iran’s money–with interest, yes, but as Gharib says, that’s how these things work. It is not the case, by any reasonable understanding of words and their meanings, that “US Taxpayers Are Funding Iran’s Military Expansion” (the title of Lake’s rant). But Lake isn’t trying to inform, he’s trying to antagonize, to whip up popular resentment of the Iran deal, Obama, and Iran itself. So he’s being provocative to the point of misleading his readers in order to achieve that aim. There’s a word for that, too.