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The Hostage In The White House

Four newly released Americans made their way out of Iran on Sunday, while a fifth apparently decided to remain in the country. Thus concludes, for now, the latest in a series of business school case studies that could be titled “Hostages: Iran’s Sanctions-Proof Industry.”

The captives were liberated on Saturday after President Obama pardoned or commuted the sentences of seven individuals – an Iranian and six dual Iranian-American citizens – who had been charged violating U.S. economic sanctions against Tehran. Though this was first billed as a prisoner exchange, the White House went on to describe the transaction as a “one-time gesture,” which at least recognizes that there is no equivalence between our jurisprudence and the trumped-up pretexts on which Iran had seized the captive Americans.

Still, in Iran there must have been smirks amid the sneers at the White House description. The Islamic Republic has been taking and milking hostages since the U.S. Embassy seizure in 1979. That initial 444-day misadventure ended with the United States freeing $7.9 billion in Iranian assets while foreclosing claims by the embassy captives against their captors and without receiving compensation for the egregious violation of their diplomatic status. (To add insult to injury, it is the American taxpayer who ultimately bore the cost of compensating our embassy captives, as part of last year’s budget agreement.)

Ronald Reagan made a convoluted deal in which we exchanged missiles, which Iran desperately wanted for its 1980s war with Iraq, for hostages who had been seized by Iranian operatives in Lebanon. Iran also paid cash for the missiles, providing funds that the Reagan administration diverted to help finance the Contra rebels who were opposing the leftist Sandinista government in Nicaragua. Secretary of State George Schultz described the ensuing mess as a “hostage bazaar” in which the Iranians seized new hostages to replace the ones they were freeing. It was also the biggest scandal of the Reagan administration.

Fast forward to 2007, when the Iranians seized a British warship in the waterway between Iraq and Iran, taking 15 sailors and marines captive. They were released in exchange for five Iranians who had been taken by American forces in the Irbil, a major city in the Kurdish region of northern Iraq. The Americans were apparently trying to capture high-level Iranian intelligence and military figures who were coordinating attacks against U.S. forces in Iraq, but the Iranians who were captured in Irbil were of little significance for the most part. Since we, unlike Iran, are not in the business of maximizing value for hostages, they were soon freed in exchange for the British personnel.

After Obama took office, we paid a higher price in 2009 with the release of Laith al-Khazali, mastermind of a bomb attack that had killed five Americans in Karbala in 2007, in exchange for five British civilian hostages held by Iraqi Shia militias aligned with Iran. The Obama administration portrayed that transaction as part of the political reconciliation it was trying to foster between religious factions in Iraq. The success of that reconciliation - or lack thereof - is now plain to see.

So sure, this weekend’s release of convicted Iranians in exchange for innocent hostages is a one-time thing. Until next time, that is. Don’t be surprised if there is another hostage crisis before Obama leaves office, even though time is getting short. He has been such a compliant negotiating partner that the Iranians would probably welcome a chance to get him back at the table again.

Our history of negotiating with Iran should have taught us that the Iranians will seize and hold captives to strengthen their hand in otherwise unrelated negotiations, such as the nuclear arms agreement (don’t call this unratified workaround a treaty, because it isn’t) involving the Obama administration, Iran and four other powers. It was anything but a coincidence that the captives were held until the day that agreement came into force, supposedly freeing Iran to reclaim up to $100 billion in embargoed funds and to return to global oil markets.

A more clear-eyed president would have demanded the release of Iran’s hostages before entering into those nuclear negotiations. But Obama is himself a hostage to his own ego and self-image. He came to office believing his own press clippings about being a “transformational” president, and has shown himself nearly impervious to learning from the real-world consequences of his decisions. So what if hundreds of thousands of Syrians are dead, and millions dislocated, because of his failure to enforce his own red lines? So what if longtime strategic allies, like the Saudis and the Israelis, believe their security interests are merely on par in his administration’s priorities with those of the aggressive and openly hostile Iranians, and that as a result sectarian conflicts are flaring all over the Middle East? In Obama’s mind, this doesn’t mean he is wrong.

Having persuaded himself that the most important thing he could do in his remaining presidency was to make a nuclear deal with Iran, every other consideration became secondary. Whether the deal is actually likely to work: secondary. Whether it triggers a nuclear arms race in the region: secondary. Whether he encourages future hostage-taking by engaging in negotiations with Iran while it blatantly holds Americans captive: secondary.

The Iranians are, if nothing else, astute students of psychology and politics. They understand the motivations of our president better than he appears to understand them himself. And so they played him. They recognize that Barack Obama is himself a captive of his own delusions. And just as a prisoner may come to see his captors as the good guys because they feed and care for him, the intellectually hostage president has been led into seeing them as deserving of a “one-time gesture,” because they give him what he thinks he needs.

Larry M. Elkin is the founder and president of Palisades Hudson, and is based out of Palisades Hudson’s Fort Lauderdale, Florida headquarters. He wrote several of the chapters in the firm’s recently updated book, Looking Ahead: Life, Family, Wealth and Business After 55. His contributions include Chapter 1, “Looking Ahead When Youth Is Behind Us,” and Chapter 4, “The Family Business.” Larry was also among the authors of the firm’s book The High Achiever’s Guide To Wealth.

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