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An Exercise In Leverage

John Kirby and John Kerry, seated in shirtsleeves
State Department spokesman John Kirby (left) and Secretary of State John Kerry. Photo courtesy the U.S. Department of State.

My car is low on gas, so I have decided to use my credit card as leverage to get some.

I will go to the gas station and wait until the attendant fills my tank. (Yes, my neighborhood station still has an attendant.) Then, and only then, will I exert my power by handing him my payment.

You probably don’t see this as a real exercise in power. I need my tank filled, and the attendant is the guy with the pump. So yes, I am just going to buy my gas, which he would not give me without a payment. Not much of an exercise in power – unless you work for the U.S. State Department, in which case you probably see it differently.

The State Department wanted the return of hostages Iran seized. Iran wanted $400 million in Western hard currency, which the United States government had conveniently stacked aboard an airplane in Switzerland. As The Wall Street Journal reported, once the hostages were in the air, we sent Iran the money. Iran has responded, predictably, by grabbing more American hostages.

If this sounds familiar, that’s because I wrote about the fiasco a few weeks ago, when the Journal first broke the story. At the time, State Department spokesman John Kirby insisted that the prisoner release and the money transfer were unrelated; the government’s right hand literally had no idea that the left hand was passing Iran cash under the table.

The only person fooled was the administration itself. But now even that deception is fraying. Last week, the Journal reported that Kirby confirmed the cash payment was used as “leverage” for the prisoners’ release.

“If you’re asking me was there a connection in that regard, at the endgame, I’m not going to deny that,” Kirby said at a State Department news briefing. He continued to emphasize, however, that the payment was not a ransom, because the U.S. already owed Iran the money from a failed arms deal. It was simply common sense to delay the payment until after the hostages were released, Kirby argued.

In a remarkable display of cognitive dissonance, President Obama responded to the controversy over the payment a few weeks ago by articulating the very reasons ransoms are dangerous. We don’t pay ransoms “precisely because if we did, then we would start encouraging Americans to be targeted, much in the same way that some countries that do pay ransom end up having a lot more of their citizens being taken by various groups.” It’s a good thing we don’t hand organizations that seize American citizens large sums of money in exchange for their release, then.

As Sen. Ben Sasse, R-Neb., observed: “If it quacks like a duck, it’s a duck. If a cash payment is contingent on a hostage release, it’s a ransom.” The State Department’s continued insistence that the payment was not a ransom serves no one, least of all the administration.

There has been a lot of discussion of lies and liars in this year’s presidential race. It is bad enough when a candidate lies to voters. It is worse when a government lies to its people. But worst of all is when an administration lies to itself.

Such self-deception is how you end up with witless policy that endangers American citizens, befuddles our allies and emboldens our enemies. Sadly, at this point, this administration still has not figured out that to start solving this problem, it has to stop lying – to itself as well as the rest of us.

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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