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Analyst: Iran Could Spend More Than $1 Billion of $1.7 Billion Windfall on Terror

(CNSNews.com) – The Iranian regime could direct more than $1 billion of the $1.7 billion it received from the Obama administration early this year towards sponsoring terrorism, a defense policy analyst said Thursday.

Rachel Hoff, director of defense analysis at the center-right American Action Forum, based the assertion on the fact – reported several weeks ago – that Iran has earmarked the $1.7 billion to its military budget; and to her own earlier research findings that some 65 percent of its defense budget is channeled to the Islamic Revolutionary Guard Corps (IRGC).

“It is unlikely that Iran accurately reports its military or paramilitary spending, but the reported budget figures are useful as a minimum baseline,” Hoff wrote. “Applying the official spending levels to the U.S. payment to Iran, the $1.7 billion could mean $1.1 billion for the IRGC.”

The IRGC’s role in supporting terror plots and terrorist proxies around the world, particularly through its foreign operations arm, the Qods Force, is well-documented. The State Department says Iran remains the world’s “foremost state sponsor of terrorism.”

Iran last January and February received $1.7 billion, in cash, from the U.S. government in settlement of a claim for funds paid before the 1979 Iranian revolution for undelivered military equipment. $400 million was frozen Iranian funds, while the other $1.3 billion of U.S. taxpayers’ money was negotiated interest, accrued over three-and-a-half decades.

(The funds were frozen after the revolution when regime-backed students seized the U.S. Embassy and took as hostage 52 Americans who were held for 444 days.)

Late last month, Iran’s Guardian Council ratified the country’s 2016-17 budget which, according to Foundation for Defense of Democracies research fellow Saeed Ghasseminejad, incorporated a legislative stipulation that the $1.7 billion from legal settlements go to the military budget.

“There is no longer any doubt that the money the United States has paid to Iran will go to the Islamic Republic’s armed forces,” Ghasseminejad wrote in a Sept. 1 policy brief.

“It remains unclear how the military will spend it – potentially to prop up the Syrian regime, Hezbollah, Shi’ite militias in Iraq, or Houthi rebels in Yemen, or to buy heavy weaponry from Russia in contravention of the U.N. arms embargo.”

The first U.S. payment, $400 million, was flown in to Tehran on the same day as the regime freed four imprisoned Americans. The administration rejected – and continues to reject – critics’ accusations that it amounted to a “ransom,” although later conceded that it had been used as “leverage” to ensure the Americans’ release that day.

After the unorthodox method of payment – cash in foreign currency banknotes, stacked on pallets on an unmarked cargo plane – was reported last month, White House press secretary Josh Earnest played down concerns that Iran would use the cash for terrorism.

“Was the White House at all concerned that they were essentially handing the Iranians a pot of untraceable money that is potentially going to fall into the hands of people who we don’t like very much, or doing things that we don’t want to be doing?” he was asked at an August 3 briefing.

In his response, Earnest said the administration’s analysis of how Iran has spent other money acquired as a result of the nuclear deal “is that, largely, that money was spent to address the dire economic condition of the nation of Iran.”

While he acknowledged that Iran may use some of the money it gets to support Hezbollah and Syrian President Bashar al-Assad’s regime, “the bulk of the money we know has been going to shoring up their economic weakness.”

Hoff of the American Action Forum noted the IRGC’s active support for terror organizations in Lebanon, the Gaza Strip and Yemen, and the fact it sends billions of dollars to the Assad regime each year. (The office of U.N. Special Envoy to Syria Staffan de Mistura estimates some $6 billion a year goes to propping up Assad, according to a Congressional Research Service report.)

“Paying ransoms in exchange for Americans held abroad is one bad policy,” said Hoff. “Indirectly funding terrorism is another.”

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