More than a thousand Israelis and Palestinians have been killed in a matter of days, in a war that began when the militant group Hamas launched an attack on Israel from Gaza on Oct. 7.
Hamas has several regional supporters, including Iran.
Following the outbreak of the war, many critics of President Joe Biden accused him of enabling Hamas’s attack by giving $6 billion of taxpayer money to Iran, which they allege was used in part to support the incursion.
“Those American taxpayer dollars bought the rockets we witnessed killing innocent Israeli civilians yesterday,” said one post with more than a million views.
THE QUESTION
Did the United States give $6 billion in taxpayer money to Iran?
THE SOURCES
THE ANSWER
No, the U.S. did not give $6 billion in taxpayer money to Iran.
WHAT WE FOUND
Iran recently gained access to roughly $6 billion, but the money does not come from the United States government. It is a payment from South Korea to Iran for oil and gas, which U.S. sanctions effectively froze mid-transaction. In September, the U.S. agreed to unfreeze it as part of prisoner release negotiations, allowing the funds to be transferred to a Qatari account.
Following the Hamas attacks, Qatar agreed to a request from the Biden administration to temporarily restrict Iran’s access to the funds. Government officials say none of the $6 billion was ever accessed by Iran.
The extent of Iran’s involvement in the Hamas attacks on Israel remains unclear.
Origins in South Korea
To understand where the “$6 billion” number comes from, we have to go back to 2018, when President Trump pulled out of the Iran nuclear deal reached under President Obama.
The collapse of the deal meant that sanctions against Iran were reinstated. As a result, any country or company doing business with Iran could be punished. But Iran remained an important supplier of oil and gas to several countries, so to avoid suddenly cutting off that supply and potentially causing a global price hike, the Trump administration granted waivers to eight nations, including South Korea.
These waivers essentially said that as long as the countries could prove they were working on reducing their dependence on Iranian oil, they could keep buying it without fear of American reprisals. South Korea, and other countries, then resumed purchasing billions of dollars of oil and gas from Iran.
However, in 2019, about six months later, the waivers were set to expire and the Trump administration elected not to renew them. That meant anyone caught doing business with Iran would again be at risk of facing sanctions. At the time, roughly $6 billion was in the process of being transferred from South Korea to Iran for the oil it had already purchased. But the banks involved in that transfer didn’t want to risk sanction and so they froze the transactions. The money was stuck.
It remained stuck until September 2023, when the Biden administration negotiated for the release of five Americans imprisoned in Iran. As part of the deal, the United States agreed to facilitate the completion of the South Korean transaction. This was done by moving the $6 billion from Korean banks to European banks and then to a Qatari bank – all with guarantees for those banks they wouldn’t face sanctions from the U.S.
The funds then became accessible to Iran, though the Biden administration said it would closely monitor the Qatari account, and that the funds could only be used by Iran for humanitarian purposes.
A few days after the Israel-Hamas war broke out, the Biden administration asked Qatar to temporarily ignore any Iranian requests for access to the funds. Qatar agreed.
Impact of the funds
Officials from the U.S. Treasury Department and the National Security Council both stated publicly this week that Iran had yet to actually use any of that money, saying “not a penny has been spent.”
Some analysts and critics, however, have said even if these specific funds are heavily restricted, the simple fact that they exist could give Iran increased flexibility with its other money.
“Money is ultimately fungible,” wrote Henry Rome, a fellow at the Washington Institute for Near East Policy, a pro-Israeli think tank. “That is, even though the $6 billion from South Korea would be limited to humanitarian purchases, releasing it would free up an equal amount of money that Tehran could use for other purposes, including the defense sector.”
Experts also say it’s unlikely Iran would wait around for the $6 billion to become available before it would do something like sending aid to Hamas. Iran has spent billions on its own military and on supporting regional military interests for years.
“Claims that Iran would commit all of these resources toward nefarious purposes are likely exaggerated,” Rome wrote. “Tehran has competing domestic requirements for its money, and the military and nuclear enterprise has hardly been starved for resources.”
Iran and Hamas
Iran has been a known sponsor of Hamas for years. In 2020, the U.S. State Department estimated Iran spends roughly $100 million a year supporting the group.
However, Iran’s involvement in the recent Hamas attacks on Israel is unclear.
According to the BBC, a Hamas spokesperson claimed Iran backed the surprise offensive, along with other unnamed countries.
But U.S. Secretary of State Anthony Blinken said so far, intelligence does not suggest direct Iranian involvement.
“There’s a long relationship between Iran and Hamas. In fact, Hamas wouldn’t be around in the way that it is without the support that it’s received from Iran over the years,” Blinken said in an interview on CNN. “In this specific instance, we have not yet seen evidence that Iran directed or was behind this particular attack, but there’s certainly a long relationship.”
A spokesman for the Israeli Defense Force echoed that sentiment, according to several news reports, saying, “Iran is a major player but we can’t yet say if it was involved in the planning or training.”
The Iranian mission to the United Nations released a statement following the attacks that was supportive of Hamas, but that denied direct involvement in the attack.
The Associated Press contributed to this reporting.
UPDATE: This story was updated on Oct. 12 to reflect a new agreement between the United States and Qatar to prevent Iran from accessing the South Korean money.
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