WSJ What’s News - How Iraqi Banks Funneled Funds to Iran

Episode Date: September 9, 2024

P.M. Edition for Sept. 9. U.S. officials say that Iraqi banks used a system created by the U.S. to send money to anti-American militia groups. WSJ’s David Cloud explains. And WSJ’s Jess Bravin discusses how emergency appeals seeking to stop EPA rules are flooding the Supreme Court. Plus, mammograms aren’t always enough to catch cancer. The Journal’s Brianna Abbott explains a new FDA rule that can help women. Tracie Hunte hosts. Sign up for the WSJ's free What's News newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices

Introducing TD Insurance for Business with customized coverage options for your business. Because at TD Insurance, we understand that your business is unique, so your business insurance should be too. Contact a licensed TD Insurance advisor to learn more. Emergency appeals led by EPA challenges are flooding the Supreme Court. And how Iraqi banks funneled money to Iran using a U.S. built system. All over the Middle East, Iran seeks access to dollars and diverts that money to help their militia allies. Plus, the FDA introduces new guidance as mammograms aren't always enough to rule out cancer.

It's Monday, September 9th. I'm Tracy Hunt for The Wall Street Journal. This is the PM edition of What's News, the top headlines and business stories that move the world today. The energy industry and Republican-led states have flooded the Supreme Court with emergency appeals seeking to block new Clean Air Act standards

from taking effect, even as there are against the rules proceed in lower courts. This is becoming an increasingly common strategy as the court has become more willing to intervene in cases much earlier than normal. Jess Braven covers the Supreme Court for the Wall Street Journal and he joins us now. So Jess, what's going on with all these appeals? Well, these are what are called interlocutory or emergency appeals. Sometimes they call this the shadow docket at the Supreme Court because a party wants the justices to intervene well before a lower court has made its final decision. They want the Supreme Court to issue

an order that either makes something happen or stops something from happening while litigation is going forward in the trial court or the appeals court. The liberal members of the court have been the most unhappy about this new phenomenon because often it's the conservative majority implementing some policy or procedure that they disagree with. Just today, Justice Elena Kagan, one of the court's liberal members, told an audience at New York University that while sometimes these emergency orders are justified, many times they don't produce the court's best work because the justices have to reach a decision without the full briefing and trial records that come in the

normal course of litigation. She said that maybe it's time to slow down the flow of emergency or shadow applications to the Supreme Court. What kinds of cases are we seeing right now? Well, there are a lot of cases. Some almost always get denied. That's usually a prisoner or a non-citizen immigrant who wants to avoid deportation. Justice is not very sympathetic to those cases and they usually are denied. But the Supreme Court is becoming much more receptive to cases filed by state governments,

particularly Republican-led state governments, and by industry that's unhappy with regulations that the Biden administration has been putting out. What are environmental advocates saying about all this? Well, they're unhappy, obviously. What's the emergency? These regulations don't go into effect until the 2030s. So why does the Supreme Court have to intervene at this point? Industry says it's because preparing to comply with the regulations down the road imposes costs on us and we don't want to have to pay those costs if we expect to

ultimately win the case. Jess Braven is a Wall Street Journal Supreme Court correspondent. In business news, Norfolk Southern Chief Executive Alan Shaw is expected to depart the company as soon as this week amid a board investigation into an alleged relationship he had with an employee at the railroad. That's according to people familiar with the matter. Norfolk said that its board had hired a law firm to conduct an independent investigation of the allegations. Shaw didn't respond to requests for comment. Norfolk said it wouldn't comment further until the probe was complete. As we mentioned in our morning show,

Apple announced its new AI-enabled iPhones today. Demand for the new phones will offer another test of market appetite for the technology. The company's rivals have spent billions investing in models that can chat and interact with users in human-like ways and write and produce images and animations. Yet, investors have grown weary of AI spending this year as many companies have yet to show a clear path to profitability.

A Move Higher in U.S. stocks today has some investors breathing a sigh of relief after last week's brutal sell-off. The Dow ended up 1.2 percent, while the S&P 500 and the Nasdaq Composite were both up 1.16 percent. Coming up, why U.S. officials say money from Iraq was funneled to Iran. That's after the break. I'm not going back to university to be your friend. I'm going so I can get Uber One for students. It saves you on Uber and Uber Eats.

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Savings may vary. Eligibility and member terms apply. Around two decades ago, as the U.S. occupied Iraq, the Federal Reserve Bank of New York played a key role in processing Iraq's oil earnings and international transactions. Now American officials say that this same system set up by the US and Iraq is being used to funnel funds to Iran. The officials say that among Iraqi banks overall, as much as 80% of the more than $250 million in dollar wire transfers flowing through them on some days were untraceable.

They say that some portion of that amount went secretly to Iran's Islamic Revolutionary Guard Corps and the anti-U.S. militias it supports. David Cloud is the journal's deputy national security editor in Washington. He spoke to my colleague Pierre Bienneme about the path these illicit transfers took. David Cloud, Journalist, National Security Editor, Washington, D.C. about the path these illicit transfers took. Bankers who were working on behalf of Iran began generating billions and billions of dollars in false and fraudulent transactions that really had no economic purpose

other than to tap funds that were held at the Fed and to send them to unknown recipients, including Iran, were told by US officials. Nefarious people and US adversaries and militia groups and the Islamic Revolutionary Guard Corps, Iran's main militia group. By 2013 and 14, a bunch of Iraqi banks jumped in and it went on for close to a decade with very few restraints. And the US had a general idea it was going on, but it had bigger fish to fry in Iraq.

Iraq, as many people will recall, had an insurgency, then there was ISIS. The US interest was in keeping Iraq stable. So it put off dealing with this issue of diversion of dollars from Iraqi banks until just in recent years and in the last 18 months, really. What has the US done to close off these sources of funding for groups that it labels as terrorists? And were those moves effective? So beginning in late 2022, the US with very little public notice began banning Iraqi banks from doing dollar transactions.

It began with four banks in November of 2022, and since then has banned a total of 27 Iraqi banks from access to the dollar and pressuring the Iraqi central bank to impose much stricter restrictions and disclosure requirements on wire transfers out of its banks. So now Iraqi banks have to disclose exactly where the money's going, which they didn't have to do before. And if it's disclosed that it's going to some nefarious actor or someone who seems like it could be a nefarious actor, the transactions are blocked. The US says that that has succeeded in large measure in closing off this particular avenue

for Iran. But there are plenty of other ways that it gets dollars, including selling its own oil in violation of sanctions and getting dollars from those sales and using them in the same way that they use the dollars that they got from Iraqi banks. And how was that money being used? The U.S. is very confident that the money was used to benefit the IRGC, something called the Quds Force, which is Iran's overseas militia group that sponsors similar proxy groups in places like Iran, places like Syria, Lebanon and Yemen. So all over the Middle East, Iran seeks access to dollars and diverts that

money to help their militia allies. And what the Quds Force and the IRGC and Iraqi militia groups want to buy are weapons and components for weapons, including components for drones, including potentially components for missiles. That was The Wall Street Journal's Deputy National Security Editor, David Cloud, speaking to my colleague, Pierre Bieneming. The Iraqi Central Bank has announced plans to do away with its current system for wiring dollars overseas by the end of this year. The bank didn't respond to requests for comments.

Israel and Hamas have been at war for nearly a year. With that milestone coming up, what do you want to know about the ceasefire talks and what it could take to free the hostages and end the fighting. Send a voicemail to wnpod at wsj.com or leave a voicemail with your name and location at 212-416-4328. We might use it on the show. For the nearly half of American women with dense breasts, a mammogram might not be enough to spot cancer early. That's because dense breast tissue can hide tumors from view. So starting tomorrow, the Food and Drug Administration will require medical providers to notify women

whether their mammograms reveal dense breast tissue, so they might speak to their doctors and seek additional tests. Joining me now is Wall Street Journal health reporter Brianna Abbott. Brianna, how can this new guidance help save lives? The crux of the issue is that we have evidence that shows that additional testing with, say, ultrasound or MRIs or a couple other modalities can find more cancers and they can find them earlier. But the issue is, is we just haven't run these large clinical trials that really show that they reduce breast cancer deaths. So without this data that sort of definitively

shows that it saves lives, medical groups disagree on if women should get additional testing for this. So it really ends up being an individual choice for the time being between a woman and her doctor. Nicole So a woman gets this information, she has dense breasts, what are her next steps? What should she do with that information? Dr. Julie Kinn So what she should definitely do is start by talking to her doctor about it and sort of figuring out how dense her breasts are. And also another thing that can be done that's really helpful is sort of calculating her risk.

Basically take in all of her other risk factors like age, family history, reproductive history to figure out her chances of developing breast cancer. And so with all of that information together, you can sort of make a decision on whether or not you want additional screening. There are two big hangups with this. One is that not necessarily all doctors know about all of these pros and cons. And the second is insurance coverage because not all insurance providers pay for this additional screening. So right now, advocates are sort of excited that this dense press notification is nationwide so that now women will get this information but the

path forward isn't always clear. Brianna Abbott is a Wall Street Journal reporter covering health. And that's what's news for this Monday afternoon. Today's show was produced by Pierre Bienneme and Anthony Bansi with supervising producer Michael Cosmitis. I'm Tracy Hunt for The Wall Street Journal. We'll be back with a new show tomorrow morning. Thanks for listening.