Donald Trump wrong that US tax dollars went to Iran, Hamas

In the early hours of Hamas’ attack on Israel on Oct. 7, former President Donald Trump released a statement critical of the Biden administration.

"These Hamas attacks are a disgrace and Israel has every right to defend itself with overwhelming force," Trump said in a statement released on X, formerly Twitter. "Sadly, American taxpayer dollars helped fund these attacks, which many reports are saying came from the Biden Administration."

The Biden administration and its critics have engaged in robust debate over whether any of the administration’s policies may have made the attacks more likely. But Trump went a step further by saying U.S. taxpayer money was involved. That’s not the case.

The biggest issue in the debate has been whether $6 billion in Iranian money made its way to Hamas after the U.S. unfroze it in a hostage-release deal.

Trump referenced this sum in a subsequent Truth Social post, saying in part, "Crooked Joe Biden must take back and freeze the 6 billion dollars right now, before it is too late."

We reached out to the Trump campaign to see whether it was standing by its characterization that taxpayer funds were involved in the attack but did not hear back.

In August, the U.S. announced an agreement with Iran to secure freedom for five U.S. citizens who’d been detained in the country, in exchange for allowing Iran to access $6 billion of its own funds that had been frozen in South Korean banks. But where did that $6 billion come from?

As president in 2018, Trump pulled out of the 2015 Iran nuclear deal that had been reached under former President Barack Obama. The deal restricted Iran’s nuclear development in exchange for the lifting of sanctions. 

Trump’s exit from the agreement meant that prior sanctions against Iran snapped back in place, and this left open to punishment any country continuing to do business with Iran. However, the Trump administration gave waivers to a handful of countries that relied on Iran for imported oil, notably South Korea. Under the Trump-era rule, these countries could keep buying Iranian oil as long as they showed that they were working to reduce dependence.

A few months later, the Trump administration decided not to renew the waivers. This meant that countries caught conducting business with Iran found themselves vulnerable to sanctions.

At the time, about $6 billion in Iranian oil sale proceeds were being transferred from South Korea to Iran. But the renewed fear of sanctions prompted banks involved in those transfers to freeze the transactions.

The Biden administration’s August 2023 agreement allowed Iran to access the $6 billion in exchange for freeing five Americans detained in Iran. The agreement included a key restriction on how the money could be withdrawn: Iran could use this money only to pay for humanitarian items, such as medicine and food. 

In a literal sense, none of the $6 billion could have gone to Hamas in time to aid the attacks on Israel. 

Even before Hamas’ Oct. 7 attack, the hostage agreement was politically divisive, with Biden supporters praising the return of the hostages and critics saying the payment amounted to a ransom that would encourage future hostage-taking. After Hamas’ attack on Israel, rhetoric about the deal intensified.

The Biden administration countered its critics by saying Iran had not withdrawn any of the money prior to Hamas’ attacks, so the United States’ actions couldn’t have played any role. When the freed Americans arrived mid-September in the U.S., the Iranian money was deposited into a restricted Qatari bank account. Qatar's central bank is overseeing the funds, and Iran has not accessed the money, U.S. officials said.

But Hamas could indirectly benefit from money that Iran will eventually be able to secure from the hostage deal, Biden’s critics argue. The money is fungible. 

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"The safeguards in place are surely good enough to make sure only legitimate goods are purchased using those funds," said Matthew Levitt, a senior fellow at the Washington Institute for Near East Policy, a think tank focused on the Middle East. "But nobody can say what’s then done with those goods."

Foreign policy analysts told PolitiFact that fungibility is a legitimate concern in this case.

"If you had a large end-of-year bonus payment coming your way, might you start spending more money in the meantime? Of course," said Matthew Kroenig, a Georgetown University professor of government and foreign service.

This is especially true in a country with a highly centralized economy and government, Levitt said. The Islamic Revolutionary Guard Corps, an influential military branch within Iran, "controls so much of the Iranian economy, there’s no way to have comfort (that) the goods aren’t sold and some funds go to underwrite militancy."

Despite the possible risks of future fungibility, none of this supports the notion that the $6 billion came from U.S. taxpayers.

A final note: $6 billion is a fraction of the annual amount of oil sales by Iran. 

In 2022, the last full year for which data is available, Iran took in $54 billion in revenue from oil sales, meaning that other countries’ purchases are providing lots of cash to the Iranian government every year.

Trump said, "Sadly, American taxpayer dollars helped fund these attacks, which many reports are saying came from the Biden administration."

It appears Trump was referring to $6 billion in Iranian money unfrozen as part of a hostage deal struck between the Biden administration and Iran. 

One school of thought says that this money could one day allow Iran to spend money on other things, including aid to Hamas. But this much is clear: No U.S. taxpayer dollars made up that $6 billion. It was entirely money that South Korea paid to Iran. Amid sanctions, the money became frozen in banks on the way to Iranian coffers.

We rate the claim False.