After Iran-backed Hamas terrorists massacred about 1,200 Jews in Israel and Iran-backed militias throughout the Middle East attacked U.S. bases across the region, the U.S. State Department under President Joe Biden extended a waiver that allows Iran to sell electricity to Iraq and use the money to purchase goods overseas.
“It is beyond insane,” Robert Greenway, director of The Heritage Foundation’s Center for National Defense, told The Daily Signal on Friday, three days after the State Department extended the waiver. (The Daily Signal is Heritage’s news outlet.)
“Among the most irresponsible things you can do is to pay your enemies to attack you,” Greenway, who orchestrated former President Donald Trump’s sanctions against Iran, added.
He described Iraq’s payments to Iran for electricity as a “money laundering scheme.” As of 2022, Iraq was the world’s fifth-largest oil producer, producing 4.61 million barrels per day, according to the U.S. Energy Information Administration. Yet Iraq imports electricity from its eastern neighbor.
“A major oil producer importing electricity? It’s the stupidest thing in the world,” Greenway said. “Iraq deliberately decides they need electricity and it won’t bring in countries to improve its electric grid.”
Iraq also refuses to import the electricity from its other neighbors in the Persian Gulf, he said. Instead, Iraqi leaders “deliberately” hobble their country because “Iran wants cash.”
State Department spokesman Matthew Miller noted in a Tuesday briefing that the waivers allowing Iraq to purchase Iranian electricity date back to the Trump administration.
“I would remind you of a few things with respect to these waivers in general, and that is that, number one, there are 20 waivers that have been issued for the payment from Iraq for Iranian electricity imports,” Miller argued. “They go back to 2018; they started during the Trump administration.”
The spokesman also claimed that “none of this money goes to Iran.” Rather, it remains “in accounts that are restricted where they can only be used to pay for food, medicine, humanitarian purposes, and other non-sanctionable activities. And it has been consistent with several policies that we have—one, to try to reduce Iran’s leverage over Iraq, and two, to try to wean Iraq from Iranian energy independence.”
Greenway acknowledged that the Trump administration issued waivers to allow Iraq to purchase oil from Tehran, but declared that it is “beyond disingenuous” to blame Trump for the current policy.
The Trump waivers required Iran to deposit the money to pay electricity in dinars, the Iraqi currency, which made them effectively worthless “Monopoly money,” as Greenway put it.
Trump also enforced economic sanctions against Iran. “We saw every transaction—we could shut down their banks,” Greenway explained.
Yet the Biden waiver, issued in July, authorized Iraq to move its previously escrowed funds through France, Germany, and Oman, likely to exchange dinars for euros. As the Foundation for the Defense of Democracies put it, the waiver is a “radical departure from its predecessors.”
“We would not let them pay in euros, dinars only,” Greenway said of the Iraqis. “Euros, like dollars, have value on the international market. That was a red line we enforced.”
Allowing Iraq to make the payments in euros “makes it a direct cash injection into Tehran’s coffers,” he explained.
The State Department told The Daily Signal in an emailed statement that the funds “can only be used for humanitarian trade and other non-sanctionable transactions to benefit the people of Iran.” The department insisted that “the funds do not go directly to Iran but rather to whatever third-party companies provide the humanitarian goods or selected third-party financial institutions for non-sanctionable transactions and humanitarian trade, meaning food, medicine, medical devices, and agricultural commodities.”
The State Department also explained that “Iraq has made significant progress towards energy independence,” but “will not wean itself off of Iranian energy imports overnight, and without a waiver, Iraq would not be able to pay for electricity imports at all.”
The department insisted that “none of the Iranian funds held in Oman have been spent.”
According to a Daily Signal analysis, Iran has received at least $71 billion more under Biden than it would have under Trump due to the relaxation of the sanctions Greenway helped orchestrate. It remains unclear exactly how much money Iran receives from Iraq, but estimates put it at $10 billion.
Israel is carrying out a ground incursion in Gaza, the site from which Iran-backed Hamas terrorists attacked the Jewish state on Oct. 7, slaughtering about 1,200 Israelis, including women and babies, according to a revised death toll, and taking over 200 hostages. Israel has pledged to eliminate Hamas following the attack, which represents the deadliest slaughter of Jews since the Holocaust during World War II.
The Jewish state faces attacks from Iran proxies from all four cardinal directions: in the southwest from Hamas, in the north from Hezbollah, in the west from Palestinian Islamic Jihad on the West Bank (and in Gaza), and in the south from the Houthi rebels in Yemen.
The U.S. has blamed Iran and militia groups it supports for over launching 60 attacks against U.S. troops in Iraq and Syria since mid-October.
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