Financial institutions, though often maligned especially in the post-financial crisis world, serve a vital marketplace function. Just like all enterprises, they can be vehicles for good, such as raising capital to help businesses grow, and ill, such as engaging in fraudulent activities.
On the negative side of the ledger, there is a sordid history of banks prioritizing profit over principle (principal over principal?) when it comes to doing business with evil regimes and sinister characters — most notably Swiss institutions during and after World War II, something I am proud to say my father worked to rectify.
This is what makes revelations over the latest Iran Deal-related Obama administration scandal so astonishing. Here, two big banks were unsung heroes, arguably acting against their own political and economic self-interest in refusing to do Team Obama’s bidding by liquifying billions of dollars on behalf of the Khomeinist regime.
As the Senate Permanent Subcommittee on Investigations recently revealed in a bombshell report, U.S. authorities granted a license to an Oman-based bank in February 2016 enabling it to convert $5.7 billion worth of Iranian assets from Omani rials to U.S. dollars (and ultimately euros) using U.S. banks as an intermediary. The license allowed the banks to evade an embargo specifically barring American financial institutions from engaging with Iran.
Contradicting testimony to Congress that it would not help facilitate any such transactions for the benefit of Iran using the U.S. financial system, the Obama State and Treasury Departments proceeded to pressure two U.S. financial institutions — allegedly Wells Fargo and JPMorgan Chase — to help the Iranians execute these transactions. For myriad reasons, in spite of the prodding of the U.S. government and certain profit, the banks resisted the Obama administration and refused to partake in its treachery.
For this, they deserve our applause.
I detail this story and its ramifications in a new piece for The Federalist.