U.S., Iran Resume Talks on Frozen $500 Million

U.S. and Iranian negotiators met today for a new round of talks on returning more than $500 million in blocked assets to Iran, an issue that has been linked to possible Iranian intercession on behalf of American hostages in Lebanon.

Iran’s Parliament Speaker, Hashemi Rafsanjani, has said at least five times that his country might intercede on behalf of the hostages if Washington releases Iranian assets. Most of the six missing Americans are believed held by pro-Iranian Shia Muslim extremists.

“It’s pretty common knowledge that this $500 million is the same affair,” said one Western source at the Iran-U.S. Claims Tribunal, where the talks were held.

In Washington, however, State Department spokeswoman Phyllis Oakley said, “We see no link whatsoever between these funds and the hostages.” She described the talks as “technical discussions.”

The Iranian and U.S. officials met for 3 1/2 hours at the heavily guarded tribunal and decided to meet again Tuesday on what is known as Account One--$506 million held in escrow by the New York Federal Reserve Bank. The money is Iran’s overpayment into a $3.67-billion account set up in 1981 to repay syndicated bank loans.

Although Americans and Iranians at the tribunal officially deny that the hostage issue is on their agenda, U.S. Embassy spokesman Sam Wunder said Sunday that the assets referred to by Rafsanjani “are presumably funds held by the New York Federal Reserve Bank and military equipment and funds involved in Iran’s purchases through the Foreign Military Sales Program” under the late Shah Mohammed Reza Pahlavi.

The United States still has hundreds of millions of dollars’ worth of military equipment paid for by the Shah but never delivered to the Islamic fundamentalist government of the Ayatollah Ruhollah Khomeini, which overthrew him.