Call Me Back - with Dan Senor - The inner workings of an untold (Iran) deal - with Rich Goldberg

Episode Date: September 4, 2023

Back in July, we dedicated an episode to the question of whether the U.S. was on the cusp of reaching a new deal with Iran. Or was an unofficial deal already hatched that nobody was talking about? According to Rich Goldberg, the answers to these questions are now becoming more clear. Rich has also been focused on another development that didn’t get sufficient press attention this summer: the release of US hostages by Iran. Rich wrote an important piece for The Dispatch analyzing that deal, and in our conversation today we examine it in the context of the broader arrangement Rich believes we have with Iran right now. We also discuss what exactly is going on behind all the chatter about a U.S.-brokered normalization deal between Israel and Saudi Arabia. Rich Goldberg is a senior advisor at the Foundation for Defense of Democracies. From 2019-2020, he served as a Director for Countering Iranian Weapons of Mass Destruction for the White House National Security Council. He previously served as a national security staffer in the US Senate and US House. Rich is an officer in the U.S. Navy Reserve with military experience on the Joint Staff and in Afghanistan. Item discussed in this episode: "The Disastrous Implications of the $6 Billion Iran Hostage Deal": thedispatch.com/article/the-disastrous-implications-of-the-6-billion-iran-hostage-deal/

This 60% high enriched uranium that we've been concerned about, this is the 99% of the way to weapons grade uranium from a technical perspective, stockpile is not growing as fast as it was before. Not that it's been eliminated, not that it's been removed, not that they've stopped enriching high enriched uranium at 20% or let alone at the 60% level, they have simply started to slow down their production of their highest enriched uranium to date at 60%. That's the win. For today's conversation, just one housekeeping note. I want to flag a couple of upcoming guests. We are recording Mohamed El-Aryan, and that episode will drop on Thursday of this week, not our regular Monday. It'll drop on Thursday. And the reason we're getting that in is a whole slew of recent economic numbers and

developments to discuss. And we always like checking in with Mohamed when there is news in the macro economy. And also in a few days, the opening of the NFL regular season, including the Jets home opener Monday night football against the AFC East rival Buffalo Bills. And Mohamed is a fellow Jets fan, always has keen insight, not only into economics and markets, but also into Jets football. So in the Venn diagram, he's in the sweet spot of topics I like to discuss.

And then soon after that, we'll be having Karl Rove return to the podcast to talk about 2024. There's a lot of thoughts, a lot of questions I still have. I think there's a lot of conventional wisdom out there that reflects a dynamic that is far less rigid than is actually being discussed and analyzed. And hopefully Carr will help disabuse people of that conventional wisdom.

And he also has a very interesting piece, more historical look at division, political division throughout American history that I wanted to talk to him about. But as for today's conversation, back in July, you may recall, we dedicated an entire episode to the question of whether the U.S. is on the cusp of reaching a new deal with Iran or whether or not a deal had actually already been hatched that nobody was talking about. Well, the answers to that question are now becoming more clear. It's complicated. Let me just say it's actually very, very, very complicated. So to help us understand the details, we're having Rich Goldberg back on to try to address some of that complexity and explain to us what is actually going on. Rich is one of the few experts I know that has been extremely focused on the Iran deal that shall not be named. Rich was also focused on another development a few weeks ago, which didn't get as much press attention as I had expected, the announcement of the release of U.S. hostages by Iran. Rich wrote

an important piece on the topic for the Dispatch, analyzing that deal. And what I want to do with Rich in our conversation today is look at this Iran hostage release deal in the context of the broader arrangement it appears we have with Iran right now. And we also discussed what exactly is going on behind all the chatter about a U.S. or a possible U.S. brokered normalization deal between Israel and Saudi Arabia. I think there's a lot going on there. And I also think that it's more likely than not that there will be some kind of deal announced. But if it's going to happen, it probably has to happen in the next few months for reasons that Rich and I will discuss. So it

is likely, but also fleeting in a sense that this is a critical window between now and the end of the year. As many of you remember, Rich Goldberg is a senior advisor at the Foundation for Defense of Democracies from 2019 through 2020. He served as a director for countering Iranian weapons of mass destruction for the White House National Security Council. Rich previously served as a national security staffer in the U.S. Senate and the U.S. House. He's also an officer in the U.S. Navy Reserve with military experience on the joint staff and in Afghanistan. Rich Goldberg on hostages, Iran, and Israel-Saudi normalization. This is Call Me Back. And I'm pleased to welcome back to this podcast my friend Rich Goldberg, which if I count correctly, this is your third time?

I think that's right. And as I learned from your recent interview of Mike Gallagher, I don't get any swag until five. So he was desperate for it, by the way. I mean, it's one thing to kind of make a passing joke, but Congressman Gallagher was like really persistent. And I think you all need to call the House ethics. I was making sure before there's any swag going anywhere, let's make sure this is all checked box. I will say, though, Mike Gallagher has been on the podcast.

He's part of the ensemble, but he's been on over a couple of years. I think there may be a special exception for swag distribution for people who are on maybe the who don't hit five, but bang out a bunch of episodes in a short period of time. Oh, I like that. Yes, there we go. So there may be an addendum to the to the whole protocol. But but that does set up what I wanted to ask you, which is when you were last on, which wasn't long ago. So you were last on in the middle of July. And here we are in the middle of July. And here we are in the

beginning of September. And we titled the episode the last time you were on, The Deal That Shall Not Be Named, referring to the Iran deal. And you basically predicted one way or the other that there was going to be some kind of deal or there was a deal in the works that was not being formally called a deal. And here we are. It sounds to me like you were basically right. And I want to get to that deal and what exactly we're talking about. But before we do, I want to start with a topic on which you've been prolific about, which is your analysis of the hostage exchange, hostage deal that the U.S. cut with Iran in the middle of August. And I was struck at the time that other than the piece, the very excellent piece you wrote for the dispatch, which we will post in the show notes, other than the piece in the dispatch and a few

other few things I saw, this whole $6 billion, something like that, deal got very little press attention and it was subjected to very little scrutiny, I think you argue, by design. But before we get into how this connects to the deal that shall not be named, about which you were right, can you just walk listeners through this hostage deal. What was it? What are the particulars we know? Just level set what we're dealing with here. And I want to just preface it by saying it is part of the nuclear deal, which we'll talk about and why that is. But this is just one piece of it.

And it's under the banner of a hostage deal. Right. And so you have $6 billion. It used to be $7 billion, by the way. We always talk about $7 billion of frozen Iranian assets sitting in banks in South Korea. This is money that South Korea had been paying Iran for import of its oil during a period of time that they were allowed to import some amount of Iranian crude, on condition that that money got put into an escrow account in Seoul and was trapped there. Could not be repatriated back to Iran.

Couldn't be moved to a third-party country. It could only sit there. Iran could try to use it to buy imports. When was this? When was this transaction? So the bug of this period is Donald Trump announces America's getting out of the Iran deal in May of 2018. But he doesn't actually end the exceptions to U.S. sanctions to import oil from Iran until one year later, May of 2019. So you have this entire period of time where countries are being told you got to unwind,

you got to significantly reduce, as the language of the statute reads, your imports of Iranian crude every six months if you want to keep getting this exception. So you don't have to completely end it. You can keep importing oil, but we want to see that you're reducing your imports every six months. And the only condition is the money you're depositing for your payments has to be in escrow in your capital, Iran. It has it on the books, but it can't access the revenue. And then once these exceptions, as they're called, went away, as Donald Trump tried to really go to maximum pressure starting in May of 2019 and drive Iran's exports towards zero, then that money was truly trapped.

It was just sitting there in an account. Iran couldn't access it. The South Korean bank said, we can't let you do anything with it. You know, if we let you process a transaction, even if you claim it's humanitarian, we could get hit with sanctions. You know, Iran has a history of using the banner of humanitarian transactions for illicit purposes, fake companies, a big Turkish case. All money is fungible. So if they say it's for humanitarian

purposes, it frees up money to do other things. So let's just... Yeah. So there's this money sitting there. We'd always talked about $7 billion. The Iranians for two years had claimed there was $7 billion there and they wanted it out. They had done all kinds of things to the South Koreans for the last couple of years to try to terrorize them into releasing the money or pressure South Korea to pressure Washington to allow South Korea to release the money. They had harassed South Korean tankers in the Gulf, continued to send people there, threatened terrorism, all kinds of things. Apparently, because of the change in the currency and various calculations, that $7 billion today was worth $6 billion today. And that's the money that they wanted out as part of this broader

nuclear deal, as part of other pots of money that will be opened up under this nuclear deal. But in this particular window, because they wanted to frame this as money that would be used by Iran for humanitarian purposes only, it's a gesture, supposedly, that helps facilitate a prisoner exchange of some number of Iranian prisoners in the United States, people who have been picked up for sanctions evasion or espionage tied to the IRGC, the Revolutionary Guard Corps or the Iranian government somehow, in exchange for five Americans who have been held hostage in Iran for a certain number of years each. And so the deal is $6 billion plus Iranians for five Americans. That's $1.2 billion per American,

if you haven't got your calculator out. Just so you understand, Barack Obama, when he did the nuclear deal back in 2015, they had a side deal like this for prisoners. For four Americans, right? Correct. For at least four Americans. For about $1.7 billion. So the price per American has almost tripled. We talk about inflation. There's inflation apparently in the hostage-taking market as well.

The price of an American has gone from $400 million each to $1.2 billion now. But how does this money now get to Iran? This is now where if you're just in a food fight— Can you just hold on? Just so I understand. So in 2015, the Obama administration does this deal with Iran. They get four americans back so these american hostages that were just released this summer were all captured since then since 2015 correct okay so they do want hostage deal and some of them by the way that were captured after the nuclear deal the trump administration was able

to get out like xi wei wang we talk and think about the princeton phd students um those hostages two of them were part of a prisoner exchange without any money because we obviously had a different policy we're in maximum pressure got out of the nuclear deal but my only point is post 2015 after that ir Iran deal, soon after Iran was back in the business of new hostages right after. Yes. Which is, of course, the obvious reason why we don't pay for hostages, because if you pay for hostages, you get more hostage taking. Yes, you've incentivized the scheme. Okay.

So Iran has gone and continued to collect their hostages. And these people go to Iran for different reasons, obviously. Americans, by the way, should not go to Iran. You are an Iranian American and you have family back there. You have a business interest back there. You think based on your politics or whatever it is. You have an angle for a deal, an investment deal. Somebody's threatened your family and you get lured back.

There's all different kinds of reasons why you could end up. You're a tourist. You're a student. All these different reasons. Don't go to Iran. Don't go to Iran, period. We should just have that as like a caveat, like big flashing lights. This is like a public service announcement. Yeah, public service announcement. Right. Exactly. But these people, for various reasons, ended up in Iran, got taken hostage. And the U.S. government does have a policy of trying to get them back. But the US government has a very broken hostage policy. Very broken. I have seen this. I've been part of some of these meetings when I was in the administration. And we have very noble servants who are dedicated to getting Americans home. And they are under pressure

constantly from the families of these hostages who are going through complete pain and anguish. And it's very difficult to try to have, you know, in your brain, the humanitarian piece of empathy for families and what these people are going through actually in one of the most horrible political prisons on earth versus the policy goal. We can't incentivize hostage taking and we need to do something different. What ends up happening is in that pull and push architecture, you just sort of do nothing. And you monitor and you ask and you try to have consultations and you work through the Swiss to have some sort of dialogue. In the case of Iran, in the case of other countries, you have other mechanisms for dialogue. Obviously, Russia takes Americans as well.

And in the end, you have two choices. Either you put a ton of pressure on the other side or you offer incentives and cash rewards and pay a ransom. And there are European countries that pay ransoms very often. We know that. And not just in Iran, but another context, we think about the Horn of Africa and the pirate hostage taking that went on, some terrorist groups that take people hostage.

Our European friends are the worst at this. They just completely are ready to write whatever check somebody wants to get a citizen back and it incentivizes the entire industry. But the American government goes into a bureaucratic process where it's like, okay, we have their people. They now have some of our people. They're not equivalent in any way, but we're going to wait for their call. And at some point, if we just hold firm, they're going.s government official you say no not going to do that deal no we're not going to entertain that we'll only release this person for this deal etc and you start getting into a people for people negotiation if you were really firm and really had a policy of trying to deter hostage taking you would start punishing the people involved in various ways, some overt, some covert. We may or may not do that. It doesn't appear that we are doing that today, certainly. And if you are taking a European approach, you say, oh, you know, it's

just, we just need to get people home, whatever it takes. Let's just pay the extortion. Let's just pay the racket. And we'll hope this doesn't happen again. And so if you were just looking at this deal in a hostage-taking perspective, it's bad hostage policy. It encourages more hostage-taking. What happens to the $6 billion? The $6 billion is getting transferred from South Korea to Switzerland. It sits in South Korea in South Korean won because part of our sanctions law was that that money deposited for oil had to stay in the local currency to be potentially used for local goods only by Iran. So it's being moved to the Swiss. The Swiss are now exchanging those yuan for euro. And then the Swiss are going to transfer the 6 billion equivalent in euro to a bank in Doha, Qatar, with the Qataris having played say, oh, we'll take Iran's money. They trust us. We have a good relationship.

It'll be in a Qatari bank. The U.S. will be able to have some modicum of oversight here. And we will use our best efforts to ensure that anything that Iran wants paid out of this $6 billion now in euro will be paid. We'll process those payments for imports, humanitarian goods, anything that's not already sanctioned by the United States. And if you're a European company that's been wanting to sell something, if you're an Asian company that wants to sell something, just come to Qatar, come to our bank. We'll work it out with the Iranians. They've got a shopping list. We've got the cash.

We'll make sure it all complies with U.S. sanctions. And so that's $6 billion. But of course, it's $6 billion, as you said earlier, that's fungible. And now there's $6 billion in Tehran or somewhere else that they can use for other purposes. Okay, so I just want to come back to something you alluded to. You worked in the Trump administration. You said in the Trump administration, the administration won release of two hostages without paying a dime. Now, because we often hear, yes, it is horrible to negotiate for the release of hostages,

because if you are giving something up, it will only incentivize future hostage taking, as we just talked about the difference post-2015 after hostages were released, that we wound up with more hostages in Iran. And then the response is obviously, of course, which is understandable, by the way, the response to the concern about this is always is, well, of course, but, the but being we have to do everything we can to get our hostages home. These are U.S. citizens, which is, of course, like any sentiment of compassion would lead one to think we've got to do everything we can to get these people home as though that were the binary choice. Either you negotiate and you get and you get the release of your citizens or they stay and rot in a prison.

And I think what you alluded to is that in the previous administration and in some other administrations in modern American history, we have gotten hostages home without taking steps that one would associate with incentivizing future hostage taking. So can you just explain that a little more? Yeah, I wrote a whole piece on this separately in the New York Post shortly after Russia took Evan Gershkovich, the Wall Street Journal reporter. And the fact that Russia today, following, we already saw them pick up Brittany Griner last year on trumped up charges with respect to her carrying

certain illicit material in her suitcase. And of course, that could have been discharged in a different way. They decided to make that the excuse to hold her sentence or leverage her for something. And the Biden administration didn't exactly pay for her release in cash, but under enormous political pressure to do something to get a very prominent person home, decided to skip the line with other Americans who were being detained unlawfully in Russia and negotiate the release in exchange for Greiner of one of the most dangerous, violent arms dealers on earth, Victor Bout. Just not an even trade in any measurable way.

But be that as it may, Putin sort of said, I take a hostage, I take somebody of prominence, not just a random person. There are some people who get taken who are American hostages, and you see their name in the newspaper and you have no idea who it is and you never remember their name again. And it's sad, but it's true. You take somebody who has a little bit of celebrity, you take somebody who has maybe their byline in the Wall Street Journal now,

let's see what the price is now. So Evan Gershkovich gets taken. And it was at that moment that I thought, okay, this is the perfect time to reset our policy as a government and disincentivize, whether it's Vladimir Putin, whether it's the Iranians, or whether it's the Chinese. By the way, the Chinese have a new espionage law that a lot of American businesses have noted. There's a State Department advisory out. At some point, they're going to take a prominent American just like this. That's going to happen. I don't know when. It's going to be soon. It's going to happen. And they're

going to use the espionage law behind it. And we're incentivizing it to happen right now with our hostage policy. But with Evan, rather than say, we're imposing sanctions across the board on the following people that the intelligence community has linked to his seizing and his processing and this judge that's in charge of this kangaroo court and the guard that's at the prison and we're going to find out who their family is or we're going to have cyber operations against them. We're going to freeze all their funds and we're going to make them known. Make everyone's life hell to the extent you can, overtly, covertly, and put a ton of pressure on and say, we're not negotiating this. You're releasing him immediately and we're going to keep increasing pressure every week you keep him. We waited. We went through a bureaucratic process. We've labeled him an unlawful detained American. So now the inner agency, quote unquote, can start meeting about his case. And what? Wait until Putin comes to say, here's who we want for him. Here's what I Americans you have. And we're not doing this deal in South Korea. We've gone completely the other way.

And so you're right. There is a choice to be made here every single time. You can respond with pressure. You can respond with complacency and status quo. Or you can respond with complete sort of incentive, appeasement type approach. The latter two, in my view, are mistakes. The right approach is to respond with pressure and to show there will be no benefit to doing this. In fact, the cost will go up every day you continue to hold an American.

Okay. So you believe that this is tied to this new phase we're in with this unacknowledged agreement with Tehran. Yes. The deal that shall not be named, as we called it in the last time we spoke in July. So where are we in the midst of this nuclear agreement that's not an official nuclear agreement? And where does this hostage deal tie into it? We're so far along that we now have U.S. officials going on background with mainstream media to say that they're very proudly not enforcing oil sanctions against Iran anymore as Iranian exports to China are skyrocketing this month.

We understand that depending on what analysis you're reading, and there's a lot of different trackers of tankers and potential exports, there's one piece in Bloomberg that says that Iran is now over 2 million barrels per day in their oil exports. There's a more recent piece saying, well, we think they're 1.3, 1.4 million barrels per day this month in oil exports. Whether it's 1.3, 1.4 or 2 million, 2.2 million, these are huge numbers for Iran. When you think about where we started, which was around 300 barrels per day, going up to 700,000 barrels per day, that range at the end of the Trump administration, and still even into 2021, not really getting to the 1 million barrel per day mark, if they're now moving into 500,000, a million plus barrels per day increased exports

to China, as China itself, this is a little bit conflicted inside the energy community, but most people agree that they are stockpiling heavily right now, looking for different discounted crude. They can get discounts from the Iranians. They can get discounts from Russia. And so this is this moment where the Americans are now saying, we're not enforcing our oil sanctions as part of a deal that we don't acknowledge as a deal, but we're just going to let you know that we're not enforcing our oil sanctions anymore. Okay. That's one big, big, big piece of what's going on. We already had seen money from Iraq move out of Iraq. There was $10 billion or more sitting in Iraq. The administration issued a waiver back in July that said that the Iraqis could move Iran's money that's been trapped in Iraq.

Similar situation to South Korea. A little different because it has to do with payments for electricity and gas, not exactly for oil imports. But similar concept, use the same frame of mind. There's this money, this pot of money, $10, $11 billion sitting in escrow. And the Iraqis are continuing to import electricity and gas. They're going to be paying more. This new waiver for the administration allows that money to be moved to a bank account in

Oman, some sort of conversion to euros there, and the Omanis will be the stewards of the Iraqi money in the same way that the Qataris are being the stewards of the South Korean based money. So, you know, what is this, $16 billion, maybe now it's been freed up, billions and billions more in increased oil revenue, potentially. And then there is the $7 billion that's still unaccounted for, which was the Iranians had been running around in the middle of the summer, saying that they had been cleared hot to exchange their latest round of special drawing rights from the IMF, the International Monetary Fund. This is sort of the monopoly money that just gets created out

of thin air as a way of making quick capital available for members of the IMF in the midst of economic downturns, COVID, etc. The Iranians are eligible for $6.7 billion of the latest SDR round. And they can access that money by trading their SDRs. This is the monopoly money, the IMF. It's not real currency. They trade these SDRs with another member of the IMF for some actual fiat currency. So the Qataris or the Omanis could step up, if ever confirmed, and trade Iran's SDRs for euros. And so that may already have happened. No one will confirm this. No one will deny this. Let's just say that's another pot of money that's out there. And then the Iranians are on the hunt

for more money as this deal goes forward. And we'll talk about the other side of the ledger of what the Iranians are doing as part of this deal. The one other pot of money we know of so far is in Japan. The Iranians have gone to Tokyo. They've asked for the release of $3 billion. There has been follow-up high-level bilateral conversations between Tehran and Tokyo. And there's supposed to be a meeting on the sidelines of the UN later this month in New York to agree on some framework where the Japanese will work with Washington to do the same deal that the South Koreans just did. There's other money out there, obviously, in India, in China, et cetera.

Okay. So headline. That's the money. Right, right, right. I just want to break this down. So headline there is Iran's traveling around the world freeing up a bunch of money that it didn't have access to a year ago. Correct. With U.S. authorization.

With U.S. authorization and in some cases more than authorization. With U.S. machinations, I mean the machinery of the U.S. government kind of making it happen. So Iran has access to a whole lot of liquidity all of a sudden, and at the same time has access to all this money. What is Iran doing with regard to its nuclear program? So in this deal, that's not a deal, that everybody denies there's any deal, with sanctions relief that Tony Blinken, the Secretary of State, went to a microphone and actually said there's no sanctions relief as part of this deal. Literally the day that they announced the hostage deal, he said to the press, there's no sanctions relief in this deal. We want to make

that clear. What is the $6 billion? What is that supposed to be? Okay, anyways, so we have the money on this. And now we have breaking news reports that Iran has, quote, slowed its production of 60% enriched uranium. That's the win. And that was first a leaked report in the last few days. And now we understand the International Atomic Energy Agency, which is the UN's nuclear watchdog, they produce a quarterly report in which their inspectors have gone in, measured Iran stockpiles, looked at all their facilities, seen what they're producing at what levels, how much. They'll issue a report probably in the next few days. You'll see them hold their quarterly board meeting in Vienna the week of September 11th. And that will be the report that

everybody says, oh, look, look what they reported in June. Look what they're reporting now in September. This 60% high in rich uranium that we've been concerned about, this is the 99% of the way to weapons grade uranium from a technical perspective. Stockpile is not growing as fast as it was before. Not that it's been eliminated. Not that it's been removed. Not that they've stopped enriching high in rich uranium at 20%, or let alone at the 60% level. They have simply started to slow down their production of their highest enriched uranium to date at 60%. Okay.

That's the win. And the significance of going from 60%, what's the next step function up from there? So 60% is just short of a weapons-grade uranium threshold of 90%. It sounds like a lot. It sounds like, whoa, 60 to 90. I mean, that's like a— Right, sounds like a third. That's 30 yards. I mean, you know, that's three feet down.

Explain why it's not—that once you're at 60, the jump— On a technical not that once you're at 60, the jump basis. Once you're at 60, the jump to 90 is the hardest. The hardest technical feat for the Iranians was moving from low enriched uranium down in that three five percent level. To go up to 20 percent to move from low enriched uranium to the threshold that we consider highly enriched uranium, which is 20%. The next hardest achievement of theirs was to figure out how to go from, let's say, it's like upper middle class, if you will, of high enriched uranium. It's not quite high enriched uranium, but you've crossed the threshold. How to get to much higher enriched uranium at a technical way where you have confidence that you might be able to produce weapons-grade uranium if you tried. And that has already been achieved as well

in the last two years. They went to 20% originally in January of 2021. Then they later in the year moved to 60%. And they've continued to perfect their centrifuges their their arrangement of centrifuges which is called a cascade they've rearranged them we detected back in january we being the international atomic energy agency detected with their inspections production to 84 percent the iranians said oops we didn't we didn't intend for that that was a mistake I don't know how you mistakenly produce 84%, but it's what they claim. So let's just state, as a matter of fact, they are likely capable of producing weapons-grade uranium today, if they really tried.

That means they are, you know, Iran is like basically on the cusp of being a nuclear threshold regime at the time of its choosing, so long as it hovers around just beneath that 60%. And there's two components to it, largely. One is, do they have the centrifuges in place? And do they have a stockpile? They have a stockpile. At this point, they're not reducing their stockpile. They're just not growing it as fast.

And they're not destroying or removing a single centrifuge. They're not shutting down a single facility. In fact, there is one facility, a new facility that they are constructing deep underground near one of their existing ones at Natanz. And that reportedly is scaring everyone in Washington and in Jerusalem, that it may be so deep underground, so hardened as to be impenetrable to a military strike. And that would be really one of those game ending moments of completing that facility, having their whole infrastructure in place, and then it's, you know, when does the Supreme Leader, you know, say yes.

Okay. So you have argued that Iran, through all of this that you're describing, has, or the U.S., the Biden administration, has evaded the Iran Nuclear Agreement Review Act. So can you explain what the Iran Nuclear Agreement Review Act is? Why don't you do that first? 2015, we're about to have this nuclear deal, this JCPOA. And some folks like me said this should be submitted to the Senate as a treaty. It implicates a whole bunch of US laws, sanctions. It's an arms control deal. Let's put this to a vote in the Senate and let's have law that says they can't waive any sanctions unless they've submitted it for a treaty. Well, Senate Democrats weren't going to go along with that. The Obama administration opposed that. So then we said, okay, well,

what if we treated this like a trade deal where these are trade sanctions effectively we have in place. Congress has passed a whole bunch of sanctions laws that the president is talking about waiving in exchange for a nuclear deal. Let's say the president has to propose this deal to the Congress and have it approved by both chambers by a simple majority. No, that won't do either because they had done the math and they knew this couldn't pass the Republican House and would have trouble in the Senate even on a simple majority. And so they came up with this compromise that I never liked, but it gave Congress some bite at an apple, some delay in the deal, some amount of review,

some prerogative of oversight. And they treated it more like an arms sale deal, which is to say it gets notified to Congress. The president can't do anything until Congress has had time to review it. Congress has the opportunity to pass a disapproval resolution, not an approval, but a disapproval from both chambers. And then the president, looking at a joint resolution of Congress, could veto it and then force either the House and Senate to have to override the president's veto. So a huge bar to have to overcome for Congress to actually stop the deal. But it required the president, within five days of an agreement, sending it to Capitol Hill, 30 days of congressional review, votes, debates, the American people talking about

it, nightly news talking about it. And in fact, when you look back on it in 2015, having the House of Representatives vote on a bipartisan basis to reject the JCPOA, delegitimize it from day one in the eyes of the American people. And it never really had support to be able to endure a Republican administration. And in fact, that's exactly what happened. Okay. The law says any agreement that implicates statutory sanctions, that is to say not executive orders that a president has issued, but laws that Congress has passed sanctions on Iran, and tries to suspend those sanctions in exchange for any nuclear concession by the Iranians, however ridiculous the concession is, if it touches the nuclear program in exchange for that sanctions relief. And it doesn't matter what that agreement looks like. It's signed,

it's unsigned, it's written, it's oral, you call it an understanding, you call it a handshake, you call it whatever you want. It's covered by this broad definition that has to get submitted to Congress, has to be subject to that 30-day review before any of the sanctions relief can be lifted. Okay, so what did the administration do here? In the middle of August recess, they've announced that there's a hostage deal, right? Okay, so hold on, hold on. So middle of August, just to level set here for our listeners. So during August, basically the month of August, Congress is out of session. There's like nothing going on in Washington.

Every major elected official in Washington more or less scatters. So generally speaking, if there is big news happening in August, it's typically the slowest in terms of getting a congressional response. It's just very hard for members of Congress to get organized. They're not in regular communication with one another. Leadership isn't it? Congressional leadership isn't in contact with their members. So if something controversial occurs in August, the difference between it getting attention then from Congress and action and scrutiny

versus if it happened in, say, October or November or March is day and night. If you want to get something done that would otherwise catch the attention of Congress and you don't want it to catch the attention of Congress, best time to do it, August. Exactly. And so that's when they've rolled out this hostage deal. The $6 billion has already moved out of South Korea. And you really think they timed it? You really think they timed it for that reason?

It's quite the coincidence. It's possible not. It's possible not. But it's quite the coincidence. Now, I will say that they had already issued an actual waiver earlier in the year when Congress was in session. That was for the Iraqi money. But they insisted there was no nuclear deal. It was simply a waiver to help Iraq evade the diplomatic and political pressure that Iran was putting on them for keeping their money in escrow. And so we were just doing Iraq a favor. Got it. Right. Happened to be that it was tied to a nuclear deal, but they didn't acknowledge that. They didn't claim it. They issued the waiver. They said nothing to do here. Now they do this very controversial South Korea deal. They moved the money out of the bank account in South Korea already to Switzerland.

We're waiting for confirmation that it's moved into Qatar. And there's been no waiver issued, by the way. They're doing this all on a general license and saying that somehow their reading of sanctions laws allows them to just move the money out of an escrow account. I, to this day, do not understand how they can make that claim. We literally wrote into the law in 2012, must be kept in escrow. It's like in the law, you have to issue a waiver. Okay. We'll have to have some lawyers debate that one. They've done that. The money's moved. There's nobody on Capitol Hill to object. There's nobody to call a hearing. There's nobody to put forward a motion, a resolution of disapproval or anything.

And they've now established this mechanism with the South Korea precedent that they can just move money without even telling you. They've just moved the money out of South Korea precedent that they can just move money without even telling you. They've just moved the money out of South Korea without even notifying Congress of it. So now if Japan wants to move the $3 billion, how will you even know unless it leaks out in a Japanese press report or the Americans admit to it? How will you know if the Indians suddenly cough up a bunch of money that's in Delhi? You won't. They can now just start moving money around without Congress even knowing about it. How will you know if the Indians suddenly cough up a bunch of money that's in Delhi? You won't. They can now just start moving money around without Congress even knowing about it. So

this is an amazing sleight of hand that has happened under immense shrouds of secrecy. And oh, by the way, all while something else is happening under this shroud of secrecy, which is this ongoing investigation of the U.S. Special Envoy for Iran, Rob Malley, who we now have learned more about from the Tehran Times, an Iranian IRGC newspaper in English, than we have had any information from the New York Times. Because somehow the Iranians have gotten a hold of all kinds of leaked documents, internal State Department documents, whether it was a hack or a leak. And we now can see online from the Tehran Times the actual notification to Rob Malley

suspending his security clearance, notifying him he's suspected of things that could put national security in jeopardy. He can't handle classified information anymore. We know nothing about this case other than what the Terror on Times has reported throughout the summer. It's an amazing thing. He just got a job at Princeton teaching for the year and some fellowship at Yale while he is under active FBI investigation on leave from the State Department. The whole thing is amazing. That this can all go on together in secret is, to me, would never be allowed under a Republican administration. That's all I know.

I mean, I don't know how they're able to get away with it, but they have. In some ways, as a political operative, I tip my cap. Like, wow, you guys, you must have spent so many man hours with the lawyers at the State Department and NSC saying, let's whiteboard this. How can you piece together a nuclear deal that can evade Congress's scrutiny? Show me all the money, show me how you would move it, show you what you would claim, how you would justify it. Okay, let's start rolling it out right around the congressional recess.

Okay, so I want to pivot from this topic to another part of the world where there may be embers of good news, and I just want to spend a few minutes on it. We could probably dedicate a whole episode to it, which we probably should. There is a lot of news and noise and sort of breadcrumbs about a possible normalization deal between or path to normalization, diplomatic normalization between Saudi Arabia and Israel, midwived by the United States government, by the Biden administration. So my first question is, what do we know? You're following this very closely. You're talking to get a deal with Saudi Arabia. Well, you make it that public that you're negotiating and that you're that confident.

Then all the opponents of Saudi Arabia, of Israel, of the Palestinian lobby, everybody's going to come out of the woodwork looking to muck it up. And all the reporters are going to come out of the woodwork looking for sources, digging in, who do they find. You can't do a deal under that much scrutiny. The Abraham Accords would never have happened in that way. You didn't know about the Abraham Accords until you knew about them. Okay. So what's on the table? It's what was always on the table. And that is Mohammed bin Salman, the crown prince of Saudi Arabia, said late last year, if you want to see Saudi Arabia normalized with Israel, I want to have an upgraded security relationship with the United States. And here are my demands, because this is a pretty tall order. I am going to be angering some people inside the Saudi system. The king's policy has been

no normalization with Israel until there's a Palestinian state. That's going to be a modification of that policy if we go forward. There is, of course, some Islamists and others who are going to stoke different tensions. The Iranians are going to stoke tensions. I need something really, really big to say that in the name of Vision 2030 and the future of Saudi Arabia and the kingdom, this is totally worth it. And so what are those things? He wants a treaty. He wants a mutual defense treaty like the United States has with Japan or South Korea, Philippines. What that looks like would be subject to negotiation.

And subject to Senate approval. And Senate. That's the big, big piece there. Ratification. He wants different things in the arms sales, troop positionings, things like that. But let's just say a package that equals a major upgrade in defense commitments from the United States to Saudi Arabia. He also wants U.S.-Saudi nuclear cooperation that includes, and this is one of the big hitches, that includes an enrichment program in Saudi Arabia where they mine Saudi uranium, which he claims he has a massive deposit of.

It's not proven yet, but he claims so. It's disputed. And they would do mining and milling and all this kind of stuff there. And then they would actually enrich that uranium on Saudi soil and produce the fuel for the nuclear reactors that are built there and potentially create a new source of uranium sales throughout the world, both raw uranium and enriched uranium, which would compete with Russia and others in the game as well. source of uranium sales throughout the world, both raw uranium and enriched uranium, which would compete with Russia and others in the game as well. There's no real mention up front on the Palestinians, but there is some expectation that he's delivering something for the Palestinians

as well. I actually think when you see this stuff in the media, you're actually hearing more the supposed demands of the Saudis that are being put forward by the Palestinians and by the Biden administration, and less so the demands that are being put forward by the Saudis. But it does make sense that they're going to need something for the Palestinians, just as the UAE got something, whether it was fig leaf or not, to be able to say, you know, we have not abandoned the Palestinian people. We're still Arabs and we're still going to work towards peace. And we've gotten something from the Israelis on that. But look what else we're getting in exchange for doing this. It's going to help Saudi Arabia become this rising middle power that they want to claim.

Okay, so what does that all add up to in the Israeli system and the American system? The Israelis, surprisingly, have come out at a very high level. Ron Dermer has come out and said, well, we think we can live with a Saudi enrichment program under U.S. oversight. We'll have to figure it out. But it's better than the Saudis turning to the Chinese and having the Chinese build their civil nuclear program with enrichment. And then there's no oversight by the Americans, which is de facto oversight for the Israelis. And maybe that will turn into a weapons program, which is the concern that we have in our nonproliferation policy of having an enrichment site inside Saudi Arabia.

As we've seen with the Iranians, enrichment sites can turn into weapons programs, not just civil nuclear programs, if you build it that way. Civilian, yeah. Civilian nuclear programs. And so there's a lot of question marks of like, can the Americans actually deliver a civil nuclear program with enrichment? Can, who would actually build that program? You know, the Americans don't enrich uranium anymore. We've stopped doing it ourselves. To actually go get a commercially built enrichment program, we'd have to contract that out or use our know-how from elsewhere. Now, obviously, the Saudis will pay for it all. So it's technically, you know, if money is no object, you can figure it out. And maybe they just want the commitment that we will be open to their enrichment,

even if there isn't ever actually that coming to fruition. Whatever it is, the fact that they're dangling, moving to the Chinese, is scaring the Americans, and is getting the Americans to even modify their own nonproliferation policy, which has been to date, except for Iran, of course, a gold standard of no enrichment as part of our civil nuclear programs. On the defense piece, we have a leak from the New York Times saying that the National Security Advisor is already whipping Democrats in the Senate trying to get a headcount. The Biden, Jake Sullivan, the Biden Democrat.

Jake Sullivan's National Security Advisor is trying to get a headcount of how many votes they would have on the Democratic side for a treaty commitment to Saudi Arabia if they had to move to a vote and get to 67, wrapped into this larger prize of Israeli normalization. And if folks like Lindsey Graham on the Republican side who have been real vocal critics of Mohammed bin Salman, going back to the Khashoggi killing, he's turned in recent days at the prospects of Israeli normalization. Turned, turned. He's,

he's, he's a chief advocate. If he listened, I mean, Lindsey thinks he's basically an architect of all of this yes yes well yeah true of all things true as we know he and mccain were architects of everything um but uh if somebody like lindsey graham comes out and says yeah this is good to go i'm for this and the republicans all fall in line and that's a yeah who comes out and says i'm for this want this, I'm not concerned about this enrichment

program that might be happening, and we need this treaty, and X number of Democrats are willing to do this as well, then maybe they can get this passed. My personal view is that- But hold on, hold on. The theory is that the Biden administration can whip Democrats to vote for it who otherwise would be hostile to any kind of normalization deal that gives lots of things to Saudi Arabia. And Republicans who may not want to give a foreign policy win to President Biden during a reelection cycle and also think that they may get a better deal, that the U S may be able to get a better deal in the future Republican administration. Uh, the thinking goes,

at least according to Senator Lindsay, uh, if Netanyahu is making the case for this Republican senators who may be skeptical, we'll be more inclined to listen. Right. So if, if,

if the Israelis are all in for this, Lindsey Graham's all in for this, the white house is all in for this, Lindsey Graham's all in for this, the White House is all in for this, and they can get to 67, then it's possible to deliver some cooperation program that includes enrichment because you're going to have a whole bunch of leaks out of the israeli system of people saying netanyahu is too desperate for this you know this is against our policy the egyptians are going to want enrichment now it's going to spark an arms race it's going to spark a nuclear arms race in the middle east you know it's a it's an empty threat that mbs is making he's going to go to china you're still going to give him the moon

with a mutual defense treaty and a civil nuclear cooperation and mining uranium, selling uranium, just not enrichment. All that can be a huge win for him. There's going to be stuff on the Palestinians. Do you really need enrichment? My view is this whole deal

comes together a lot quicker if MBS were to come off the enrichment demand. And it's harder with the enrichment demand in place. What the enrichment piece looks like, I'm not so sure. By the way, you know what else is also easier to get this done? I wrote a piece on this in the Wall Street Journal a couple weeks ago. Just restore the standard of zero enrichment for Iran. Why does MBS want enrichment?

Because the Iranians have it. They're at 60%. Right. You think he doesn't want enrichment because the iranians have it they're at 60 percent right you think he doesn't want to have the same thing he wants to have the same potential threat to them and if we were to restore all the sanctions on iran stop this crazy deal you know say that we we oppose any enrichment in iran the israelis have a military threat we would have a credible military threat and we're going to do a mutual defense treaty with the Saudis. What does he want enrichment for at that point? He doesn't need it. So they're not going to do that, obviously. They're already in an Iran deal. So we're faced with this Gordian knot of our own making, where we have the Saudis saying, you're okay with the Iranians having enrichment, you're paying

the Iranians to have enrichment, but I'm not allowed to have enrichment. So that's the piece that I think is holding everything back right now, and that they're still negotiating in great detail. And then there's going to be parts of, can they actually deliver the treaty? Or is it here are a bunch of different commitments we can make we can make you a major non-nato ally we can make you a major defense partner like india is we can do expedited long-term planning on arm sales we do a range of things we can increase our troop commitments you're already seeing a surge to the gulf right now by the way we've sent 3 000 additional americans into the Gulf in recent weeks.

Interesting the timing while we're negotiating with the Saudis to prove to them we are a security guarantor. Okay, but let me ask you a question. So you mentioned that the Israelis have basically signaled through Dermer's statement that Israel can live with, would rather Saudi have this kind of capability via the U.S. than via China. Does that also help explain why the Biden administration has gotten on board and that the Biden administration, when you look at their rhetoric at the beginning of their administration vis-a-vis Saudi Arabia and MBS specifically, and then all of a sudden here they are now seemingly wanting to, you know, they're lobbying their fellow Democrats in the Senate to get on board with a with a huge package

for what seems like the pieces, the elements of a huge package for Saudi Arabia. Is that what's motivating them? Is that that the wake up call was was Saudi diplomatic engagement with China, Beijing basically coming to the Middle East and throwing around its diplomatic weight. Yeah, MBS played Biden perfectly, right? They suddenly had a summit with Xi Jinping, rolled out the red carpet, did a deal with him on Iran, start signaling they're willing to go there for nuclear cooperation, other strategic ties, immediate attention from the White House, triage of the relationship, even talking about

a mutual defense treaty, which was unthinkable a few months ago. Now this is all happening, civil nuclear cooperation on the table. What I think is interesting, and nobody's really put the dots together, is the Israelis signaling that they are okay with enrichment, which most people believed would be an impediment, has put the Biden administration in the box of the only party that has to figure out what they can actually deliver. Because the Israelis needed to sign off on certain things for qualitative military edge, what they're willing to accept as a proliferation threat in the region, et cetera. And if they say, yeah, yeah, if the US wants to do oversight of enrichment, we'll work with you guys. We'll accept that risk. Well, now it's on

Biden to deliver all this stuff. And so suddenly the conversation is not in the news about enrichment, which is really the hard pill here. The conversation in the news is about Palestinian issues. You just see this string of news reports. The Palestinians have put forward the following demands to Saudi Arabia. Saudi Arabia is going to demand the following things out of Israel. The Israeli right-wing government may not be able to deliver this and this and this. Biden has said they're going to have to get serious.

All the headlines in the last few weeks are just about the Palestinian issue. I think that is actually driven by the Biden administration, not the Saudis, certainly not the Israelis. And it is meant to try to square the circle of how they're going to deliver Democrats on this deal. Got it. Because Van Hollen and other senators are screaming their heads off saying we will not support anything if there aren't major concessions for the Palestinians. Got it. So it's not really a Saudi demand. It's a it's a U.S. government demand via the Saudis. out of all of this, which is quite funny to me, is that the Biden administration's policies, which I disagree with, which they were stymied on from day one, going back to a nuclear deal, getting major concessions for the Palestinians, reopening consulate, and all the stuff that they were promising in the campaign that they tried to do day one, and they just couldn't deliver any of it, is now coming to fruition via Saudi Arabia.

The Saudis broke the ice and did a de-escalation deal with the Iranians. And that has now led to this wider de-escalation deal with the Americans. So they're kind of getting their nuclear deal that they always wanted. And now they're riding the back of normalization negotiations to deliver what they were not able to deliver for the Palestinians until now. I think that's quite ironic. It is. I also think that part of what's motivating the administration, it's not that they necessarily failed, it's that they didn't push that hard. Maybe they would have failed had they pushed that hard on these Palestinian-related issues because they are in conflict-free mode. They just want to de-escalate everywhere they can.

They don't want to fight with Jerusalem. They don't want fights leading into 2024. They just want to deescalate everywhere they can. They don't want to fight with Jerusalem. They don't want fights leading into 2024. They just want to calm things down, bring the temperature down. So anyways. Rich, we're going to leave it there. As always, thank you. That was a tour de force. It's very complicated stuff

and it's very detailed and it's just great to be able to call on you to kind of walk us through these details. And I think it's especially important, as I said at the beginning, because where we began the conversation was this hostage deal and its connection to a larger strategy with Iran is getting very little attention. So I appreciate what you've been writing about it. And I appreciate you coming on to talk about it. I appreciate you calling me back. Whoa, you're good, man. See, that's the kind of product placement that gets someone an expedited swag deal, even though they haven't hit the fifth episode. And I have no ethics. I have no ethics committee.

Right, right. The only other person who's that good at product placement is Mike Murphy. Mike Murphy's pretty shameless, but that was good. That was good. All right. We'll leave it there, Rich. Thank you. Thanks, Dan.

That's our show for today. To keep up with Rich Goldberg, you can do that on the website formerly known as Twitter, at Rich underscore Goldberg. You can also find his work at FDD, the think tank, and also be sure to subscribe to his podcast, the Jewish Insider podcast. Call Me Back is produced by Ilan Benatar. Until next time, I'm your host, Dan Senor.