Critics Slam Biden Admin For Waiver That Gives Iran Access To $10B Fund: 'Absolutely Outrageous'

Sparks flew Tuesday as a senior Biden administration official clashed with a reporter over it allowing billions in unfrozen Iranian assets to return to the terror-funding nation.

The U.S. extended a sanctions waiver that critics slammed as tantamount to continuing to fund Iran’s disruptive activities as its proxies attack U.S. forces across the Middle East.

"It is absolutely outrageous the Biden Administration continues to find ways to send Iran money — especially from Iraq, where the same Iranian-backed militias who are targeting American forces increasingly run the show and are helping keep Iraq addicted to Iranian energy," Rep. Mike Waltz, R-Fla., told Fox News Digital.

Secretary of State Antony Blinken signed an extension to the initial 120-day waiver that allows Iraq to pay for Iranian electricity through an escrow account, where it has so far deposited an estimated minimum $10 billion — all without fear of reprisal for potentially breaking any U.S. sanctions.

The waiver allows the payments so long as they go through Oman, where a portion is converted to euros or other widely-traded currencies for Iran to buy non-sanctioned products such as humanitarian aid. The State Department has insisted, as it did with the $6 billion held in Qatar, that the money can only be spent with U.S. approval. The department ended up quietly refreezing the Qatar-held funds.

A senior State Department official told reporters that the waiver "isn’t a free pass for all this money to move," arguing it is a "layered" and "cumbersome" process with "significant reputational risk." The 120-day waiver, extended in July and again Tuesday, continues a program of 21 waivers started in 2018 under the Trump administration to provide Iraq access to the roughly 40% of energy it imports from Iran.

Richard Goldberg, a senior advisor at the Foundation for Defense of Democracies and coordinator for the Trump administration’s maximum pressure campaign on Iran, told Fox News Digital that the State Department issued the waiver as a balance for Iran agreeing to keep uranium enrichment below a 90% threshold — the point at which it reaches "weapons-grade" levels.

President Biden, right, and Iranian Supreme Leader Ali Khamenei. (Getty Images)

"An initial report from Reuters [said] the U.S. has authorized Iran to make a $2.76 billion payment to pay off various debts out of its cash sitting in Iraq, or bulk of that was debt to Turkmenistan for gas, and then also some various international organizations dues, other things that were not itemized at the time," Goldberg noted about the last Iraqi waiver in July.

"Maybe there's going to be a gas-for-oil swap if the U.S. allows," he continued. "The Iraqis are claiming that they've achieved that … Then there's reports where the Iranian side is saying, actually, the U.S. has authorized the Iranians to use any of the more than $10 billion that's sitting in escrow in Baghdad."

"Everybody is focused on the $6 billion and, 'Is it frozen? What's happening there?' … But nobody was noticing the $10 billion over here," he added. "They are today."

Critics argue that the Biden administration should look to cut off or freeze access to all such accounts for Iran, whose proxies have carried out dozens of attacks against U.S. military personnel and assets across the Middle East.

"This move by the administration is abhorrent and reprehensible," Sen. Steve Daines, R-Mont., told Fox News Digital. "Money is fungible and the administration should know better."

"We should not be giving Iran one cent because it will be used to fund Hamas, Hezbollah and the Houthis. All enemies of Israel and the United States," Daines added.

The Pentagon on Tuesday said it had counted 56 attacks on troops in Iraq and Syria since Oct. 17, with 59 U.S. personnel injured, 27 of them suffering from traumatic brain injury while the rest suffered non-serious injuries.

Last week, the Iranian-backed Houthis claimed to have shot down a U.S. MQ-9 Reaper drone near the Yemini Coast. The drone was reportedly surveilling Yemen when a Houthi militia fired at the equipment, estimated to cost about $30 million.

State Department spokesperson Matthew Miller pushed back against critics during a press briefing on Tuesday, stressing that "there is no country in the world where we deny access to food and medicine."

"That's true with respect to Russia. It's true with respect to Iran," Miller said. "It's true with respect to every country in the world. And it always has been. That is the policy of the United States."

"When it comes to holding Iran accountable for its destabilizing activities, I would remind you that we have imposed more than 400 sanctions on Iran since the outset of this administration," he added.

The State Department referred Fox News Digital to its press conferences Tuesday when asked for comment.