One of the unexpected results of President Barack Obama’s new opening to Iran is that U.S. taxpayers are now funding both sides of the Middle East’s arms race. The U.S. is deliberately subsidizing defense spending for allies like Egypt and Israel. Now the U.S. is inadvertently paying for some of Iran’s military expenditures as well.
It all starts with $1.7 billion the U.S. Treasury wired 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.