r/moderatepolitics • u/thorax007 • 12h ago
News Article Trump Admin Renames Iran's $300 Billion Reparations Demand an 'Investment Fund' to Avoid a Political Firestorm at Home
https://www.ibtimes.com/trump-admin-renames-irans-300-billion-reparations-demand-investment-fund-avoid-political-3803535Draft agreement between US and Iran includes a massive investment fund, avoiding terms like 'reparations.'
The man who spent a decade calling Obama a traitor for sending Iran $400 million is now floating a fund four hundred times that size, just with a friendlier name on the tin.
A draft memorandum of understanding between the United States and Iran, reported by the New York Times on 28 May 2026, includes a proposed £224 billion ($300 billion) reconstruction mechanism for Iran. The fund's inclusion follows months of negotiations to end the 2026 US-Iran war, during which Tehran had explicitly demanded reparations for bombardment damage that some Iranian officials estimate at between £224 billion ($300 billion) and £745 billion ($1 trillion).
Diplomats familiar with the draft told the Times that the American side intentionally avoided the words 'compensation' or 'reparations,' opting instead for the term 'international investment fund,' a rebranding confirmed by multiple officials across outlets including Axios and CNN. As of 30 May 2026, President Trump has not signed the agreement.
Semantic Sleight of Hand Behind Fund's Framing
An Iranian official described the proposed mechanism to the New York Times as a 'reconstruction programme' that would be promised to Iran upon the signing of a final agreement. Two diplomats briefed on the latest draft used different language, calling it an international 'investment fund' that the United States would facilitate. The divergence in terminology is deliberate.
The domestic constraint is not hypothetical. Trump himself, according to the Times' reporting, told aides he would not sign any deal that could be seen as the United States directly giving money to Iran. That position is rooted in his own two-decade political record. As a candidate in 2016 and repeatedly thereafter, Trump attacked the Obama administration's settlement of a decades-old arbitration case with Iran, which involved a cash payment of £307 million ($400 million) as part of a total £1.3 billion ($1.7 billion) transfer.
Trump posted an AI generated image of a US boat shooting a laser at an Iranian jet.
Republicans called it ransom. Trump called Obama a liar. He has repeated variations of the claim in almost every major foreign policy speech since. A fund labelled 'reparations' at £224 billion ($300 billion) would hand his critics, and his own base, the exact cudgel he spent a decade swinging.
On 29 May 2026, Trump posted to Truth Social: 'No money will be exchanged, until further notice.' The same post laid out his terms: no nuclear weapon, the Strait of Hormuz open with no tolls in both directions, and the removal of all sea mines. He did not address the investment fund by name.
Two Developers Behind $300 Billion Tehran Idea
The investment fund concept did not originate on the Iranian side. According to the New York Times, the proposal is an iteration of an idea first raised by Steve Witkoff, Trump's Special Envoy to the Middle East, and Jared Kushner, the president's son-in-law. Both men are real estate investors.
Some mediators told the Times that Witkoff and Kushner had suggested promoting real estate projects in Tehran and establishing a broader investment mechanism as an incentive for a deal, a framing that has since been folded into the formal draft text.
Jared Kushner, founder of Affinity Partners, joins the consortium acquiring Electronic Arts in a landmark deal.
Witkoff, a New York property developer who founded the Witkoff Group, was appointed Special Envoy to the Middle East in November 2024 and expanded his role to Special Envoy for Peace Missions from July 2025.
Kushner, who owns his own real estate firm, began assisting Witkoff in late 2025. Iranian negotiators took the investment fund proposal and built on it, suggesting that large American oil and energy companies could enter Iran's market through joint ventures after sanctions are lifted, according to the Times and corroborated by Ynet News. The prospect of US energy corporations gaining access to Iran's reserves, the fourth-largest in the world, gives the fund a commercial logic that 'reparations' never could.
What the Draft MOU Contains and Remains Unsigned
Beyond the fund, the 60-day memorandum of understanding covers a sequence of immediate commitments on both sides. According to Axios's primary reporting, the MOU would reopen the Strait of Hormuz to unrestricted commercial shipping with no tolls, require Iran to remove all mines from the strait within 30 days, lift the American naval blockade proportionally as commercial shipping resumes and issue sanctions waivers allowing Iran to sell oil freely. The deal would also include an Iranian commitment not to pursue a nuclear weapon, with negotiations on enrichment and the disposal of Iran's highly enriched uranium stockpile deferred to the 60-day talks that follow.
Iran's access to approximately £17.9 billion ($24 billion) in frozen foreign bank assets is a parallel negotiating thread. Iranian officials have insisted on receiving at least £14.9 billion ($20 billion) of that amount during the negotiation stage itself, before a final deal is signed, in order to stabilise the economy. The US has committed only to discuss sanctions relief and frozen funds as part of the 60-day window, not before it.
Iran's Fars News Agency, affiliated with the Islamic Revolutionary Guard Corps, reported that the Strait of Hormuz would remain under Iran's management under the latest exchanged text, directly contradicting Trump's public characterisation of the deal. Military vessels, Iranian officials said, are explicitly excluded from any commitment to reopen passage. Despite two skirmishes between US and Iranian forces in the strait in the 48 hours before the MOU was confirmed, US officials told Axios they believed Iran's economic pressure was pushing its system toward settlement.
A president who built his brand on never giving Iran a cent is now the architect of the largest financial commitment to Tehran in American history, provided nobody calls it what Iran originally asked for.
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u/brusk48 6h ago
Any deal that's better for Iran than the JCPOA will be a clear loss for the US broadly and for Trump personally in the war, and it doesn't seem like there's any plausible route to a quick end to the war with a deal that's anywhere close to as good as the JCPOA from a US perspective.
We entered a war with no clear path to victory apart from a total overthrow of the Iranian government by the Iranian citizenry, and if there was ever potential for that to occur, it's certainly not going to happen now. With the Strait of Hormuz closed, no way to open it without a ground invasion, and no American political will to prosecute one, it's hard to see a reason for Iran to end the war on terms that are anything but extremely favorable to them.
There are three choices at this point: either we put pen to paper, accept the loss, and agree to some terrible terms; we keep the war going indefinitely with no peace document, the bombs keep falling, the strait remains closed, and the global oil market collapses; or we spend an enormous amount of American blood and treasure conducting a ground invasion that the public doesn't want in order to topple the regime, creating another endless middle eastern quagmire.
The whole thing is pretty bleak.
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u/virishking 5h ago
The IRGC has also now taken a much more direct grasp on the government, and any potential allies we had on the ground will remember the horrific civilian strikes and how Trump abandoned them after very little effort of support. This was a catastrophic failure from day 1, millions of people called it out as that, all while his supporters said “no the Iranians are dancing in the street” based on that video they saw that wasn’t taken in Iran. It’s disturbing how so many people won’t see this as the career-ending failure it should be. And now they can’t even deflect to their already-inflated number about the unfrozen funds in Obama’s deal
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u/brusk48 5h ago
The IRGC point is a good one; the Iran that's coming out of this war is going to be far more dominated by hardliners than the Iran that entered it.
What strikes me most is the degree to which all of the deals currently on the table would have been inconceivably biased towards Iran's interests if they'd been floated in the pre-war negotiations we were having with Iran. Even setting the JCPOA aside, we've spent hundreds of billions of dollars and killed thousands of people just to end up with a deal that's much worse than what we could've had back in January. It's a catastrophic failure.
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u/MattWalshStuntDouble 6h ago edited 5h ago
Any deal that's better for Iran than the JCPOA will be a clear loss for the US broadly and for Trump personally
The problem is ~30% of the country will never believe that a Democratic president did something good or better than a Republican president. Especially Trump. The "pallets of cash" and "10% for the big guy" outrage and rules are only for one side.
Republican electeds know this. They bank on it and can stay in office even as their policies make their constituents worse off.
Edit: spelling
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u/brusk48 6h ago
Perhaps, but there's not a ton that 30% of the electorate can do in elections without peeling off another 21% or so from somewhere in the middle. The more Trump and the Republicans govern exclusively for the 30%, the worse they'll do in the midterms, even with the current gerrymandering.
Republicans in Congress have started to break with Trump just a little bit because they're seeing the polls, too.
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u/chillinwithmoes 6h ago
Yep, this is the one thing that works on them. I’ve told my parents several times: if they want to plug their ears and pretend Trump can do no wrong that’s their prerogative, but don’t plan on Republicans winning too many elections going forward. Slowly but surely they’ve started admitting they don’t like the way he governs (sometimes).
It’s purely for selfish reasons but hey, anything to break the spell at this point.
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u/brusk48 6h ago
Yep, most of the Republican Senators and Congressional Reps are in it for the power, not for Trump's policies. If they're going to lose anyway because of Trump, the incentive to keep backing him starts to fall away.
I think it's pretty telling that a lot of them started pushing back after he pushed Cornyn out in the primary.
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u/SliceRepulsive8649 49m ago
People have very short memories and culture war fear sells better than nuanced subjects. It only took 4 years for everyone to forget how terrible he was the first time around.
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u/Important-Agent2584 43m ago
I'm not sure that Trump cares. He controls the RNC and has sway in the primaries. As long as he has enough loyalists in Congress to protect him he can just keep doing what he has already been doing: ruling via executive fiat and ignoring the rule of law.
Thanks to all the circumstances on the ground like gerrymandering, media bubbles, etc. there is no hope of getting enough people elected to hold Trump accountable for anything.
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u/brusk48 40m ago
I could be wrong, but I'd be very surprised if the Republicans still hold the House this time next year. The Senate seems a lot less likely to flip, but a Democratic House could have some pretty significant impacts on Trump's continued ability to rule by EOs.
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u/Important-Agent2584 34m ago
Trump just needs enough seats in the senate so that he can't be convicted. To convict you need 2/3rds.
I'm not sure what the House could do. Maybe something, but he's already got a long habit of ignoring regulations and the law.
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u/HavingNuclear 2h ago
At the same time though, that 21% doesn't hold a grudge. They will likely not be satisfied by the next Democratic administration and they'll be more than willing to vote Republican again regardless of how bad an idea is was last time. So still, Republicans can bank on that and ram through a bunch of unpopular stuff only to expect to be booted out for like 4 years max.
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u/TintedApostle 5h ago
30% of the country don't want to understand. They have a guttural aversion to being shown they are wrong or even learning to be better. Its just unenlightened humans refusing to be enlightened.
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u/Keith_35 5h ago
calling it an investment fund doesn't change what it is. this is reparations with a new label. the irony after years of attacking Obama over $400M in frozen assets is staggering. war is expensive either way
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u/Grizzwold37 6h ago
Hey, just for context, remember how for the past couple months, the president, the VP, the SecDef, and members of Congress were all bitching and moaning about how much money Obama “gave” the Iranians? And how that money somehow caused this conflict? Despite, of course the glaring fact that the money was simply released from being sanctioned, and always belonged to Iran.
This is significantly different from that, because it is quite literally giving Iran money. In the absolute best case scenario, they simply plow it back into nuke weapons without reconstituting their defenses. The sad reality is that we destroyed all their old defenses and now they have the impetus and the money to build shiny new defenses.
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u/Wonderful_Cookie_572 6h ago
"Art of the Deal" indeed.
To be honest, though, I really don't care. I just want this war over and for gas to stop going up. I know it won't go down right away, but at least things won't get worse.
And there's a serious silver lining to all this: the end of the US/Israel "special relationship" has probably moved up to the next presidential election. This was so open and egregious that I fully expect being anti-Israel - not just ambivalent but actively anti - to be a core winning platform plank on both sides.
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u/NativeMasshole Maximum Malarkey 4h ago
Check today's news. Republicans are trying to integrate the Israeli army into our own armed forces, making that specific issue much harder to tackle in the future.
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u/Grizzwold37 5h ago
Being anti-Israel is too much of a third rail, IMO. Ed excessive anti Israel rhetoric emboldens anti-semites, and the pro-Israel lobby disingenuously conflates the two, accusing all anti-Israel messaging to be inherently anti-Semitic.
The US doesn’t even need to be “anti” Israel, as much as it should return to its suspicious approach to Israel of the aughts and teens.
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u/Wonderful_Cookie_572 5h ago
Ok, and?
Seriously, this is the modern growing response to your concern. Yeah, it enables people who commit wrongthink. No, that is not worse than letting the relationship with Israel continue on. That's how harmful they have become to the US.
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u/PM_ME_YOUR_DARKNESS 2h ago
That's how harmful they have become to the US.
Yup. US politicians warned Netanyahu about hitching his wagon to one side of our politics, and the chickens are coming home to roost.
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u/Wonderful_Cookie_572 2h ago
He didn't just hitch it to one side, but one subfaction of one side. And that subfaction is aging and getting replaced with a new one that is very anti-Israel.
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u/TRBigStick Principles before Party 6h ago
This presidency is absolutely wild to watch in real time. It’s like Trump is stitching together the worst parts of the Obama, Carter, Bush Jr., and Hoover presidencies into a single uniquely terrible presidency.
Everyone knew this would be the end game of a war with Iran, including every advisor surrounding Trump.
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u/notwronghopefully 4h ago
You're giving Hegseth too much credit.
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u/TRBigStick Principles before Party 4h ago
I think Hegseth has always known that this war would be bad for America, but he pushes it because he thinks it will bring forth Armageddon and fulfill biblical prophecy described in the book of Revelation.
I have a unique disdain for Hegseth.
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u/Electrical_Space_850 5h ago
You’re forgetting that the $400mm that Obama “sent” to Iran were funds that actually belonged to the Iranians but had been frozen during the hostage crisis IIRC. It wasn’t even our money whereas this blackmail payment that Trump seems poised to agree to is American taxpayer money. It’s absolutely insane.
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u/rowyourboat740 5h ago
This is the end result of appointing top cabinet positions for loyalty instead of competence. I don't think anyone in the administration, expect perhaps Rubio, has the insight required to end this. Of course, an admin that paid attention to experts wouldn't have gotten us into this mess in the first place.
I wonder if the Republican voter base will ever have enough? I don't see how a two party democracy survives on this trajectory.
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u/Wonderful_Cookie_572 5h ago
Except Rubio was one of the ones actively supporting this war we could never win. So clearly his "expertise" was not actually enough to have him make better decisions than people with none.
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u/rowyourboat740 4h ago
That's fair. It's a strong statement when he's the most qualified person in that room. I've lost a lot of respect for him for how quickly he folded on his principles just for personal gain.
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u/thorax007 3h ago
Idk, in the last 20+ years of terrible political decisions, this might be the most obvious foreign blunder I have witnessed from an administration.
What makes it so bad is how entirely predictable this situation was and how there appears to be zero ways out that don't cost the current administration something they don't want to give up.
What was Rubio's plan for Iran capture of the straight?
What did Trump think would happen once they took out the Iranian leadership? Did he really believe they would just fall apart and stop fighting?
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u/thorax007 11h ago edited 11h ago
Hopefully this is not completely old or out of date.
Everything seems to move so quickly, it is hard to keep up.
Trump seems to be in a bit of a tough spot with regards to negotiations with Iran. The US attacks against the country have been quite damaging, and the Iranians want money from the US to help rebuild. The problem is that any money released or given could be used to develop weapons or fund attacks against the US and its allies in the region. On top of that Trump has been very critical of previous Presidents deals that included money for Iran. It would be quite a reversal if he decides to include any type of reparation or "Investment Fund" part of the final deal.
What do you think he should do?
Is there a way to structure a deal that includes some type of fund to help rebuild what has been destroyed, while at the same time limiting their ability to use the funds for unapproved purposes?
Does the US owe money to Iran for attacking them?
I feel like if someone broke into my house and started breaking my stuff, and then we signed a peace deal and they left, I would certainly want my stuff replaced by the people who broke it. However, and also, Iran kind of sucks from an American point of view, their support of violent groups who do bad things to people is something we really don't like. If we pay them off, it kind of seems like an acknowledgement that we are the bad guys in this situation, not them.
It certainly seems like we are both flawed nations doing what we think is best for a select group of our people.
What is Trump's way out of this mess before the midterms?
Edit: changed some words
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u/dr_sloan 4h ago
There’s been enough bits and pieces coming out that we can see the outlines of the deal and it’s nowhere close to the maximalist demands the US started the conflict with. It’s looking like the initial deal will be to reopen the Strait in exchange for ending the blockade of Iran. Along with that Iran will get partial access to frozen funds held in Qatar as shipping traffic improves. Iran will also pledge never to pursue a nuclear weapon. That’s largely the status quo before the conflict with the exception of Iran getting access to previously frozen funds. The U.S. will make a big deal about the Iranian pledge but that’s been their stated position for decades so if you didn’t believe them in the past, why believe them now?
There will also be a 30-60 day ceasefire extension where the sides will negotiate the broader nuclear deal and so far it’s looking like there won’t be a permanent moratorium on Iranian nuclear enrichment. Most likely it will be a 15 year moratorium which would be five years longer than the JCPOA. The other aspect will be what to do with the existing uranium stockpiles and it’s looking like the U.S. was backing down on their original demand that the stockpile be turned over to the US and instead is willing to accept it being downblended within Iran or turned over to another country. This last point is the one that I think caused Senate Republicans to push back last week and why there was a wrench in the deal that was supposedly nearly finalized.
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u/Goldeneagle41 5h ago
What a mess lol. I really think if Iran continues with the same regime that there will be a day that the US and other countries will have to deal with them. I don’t believe we were there yet. I believe Israel talked us into something we had no business getting involved in. This is a great example of when a leader has nothing but “yes men” what happens. In this administration, unlike the beginning of his first, he has no one to tell him something might be a bad idea.
Now Iran has a new tool. Anytime they need something they know they can shut down the Straight and cause havoc for a while. I’m sure that colluding with Russia they would be willing to do it on occasion just to raise oil prices. High oil prices help fuel the Ukraine war for Russia.
I think the US needs to realize that Israel is not our friend. Unfortunately as long as oil is king in the world the Middle East will be important. We need a strong Israel there and have them as an ally but we need to learn to say no.
Democrats should be loving this Trump has given them the midterms and it will be interesting to see what they do with it.
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u/thorax007 3h ago
Now Iran has a new tool. Anytime they need something they know they can shut down the Straight and cause havoc for a while.
Yeah, this is really quiet bad for the region. But I wonder if everyone knew they could do this in the first place. It was certainly a point of discussion in the intelligence community prior to the beginning of the war.
Do you think the confirmation that they can control the straight will lead to more steps by other countries to take that power away?
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u/ghostofwalsh 2h ago
Everyone knew they could do it cuz geography. But as long as they had something to lose they wouldn't go there. Well now they got nothing to lose, so here we are. Same reason they are firing rockets into 3rd countries that technically they aren't at war with.
The theory of starting the war is the Iranian people will rise up and put in a new govt that the US likes. Seems like that did not happen, nor is it likely to in the near future. Not sure what the plan is now. In any event, I don't see Iran as looking like a "win" when November rolls around and I'm sure that terrifies the republicans.
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u/Testing_things_out 5h ago
I think the US needs to realize that Israel is not our friend. Unfortunately as long as oil is king in the world the Middle East will be important. We need a strong Israel there and have them as an ally but we need to learn to say no.
How did Israel benefit the US in any way?
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u/thorax007 3h ago
Benjamin Netanyahu is thought to have benefited from this attack on Iran with regards to his domestic political position. Elections are coming up and he will campaign on Israel getting the US to commit military resources against Israeli enemies.
At least that is what I have read, not sure how it will actually play out.
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u/Suspicious_Mango9316 3h ago
We do not need a strong Israel. We need to stop bombing other countries and supporting internationally-labeled Israel apartheid
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u/yankeedjw 5h ago
To be fair, it does not seem like reperations or the US government directly sending money to Iran. It does seem a little shady, as some of Trump's family and friends are negotiating the deal and in prime position to take advantage of whatever "investment" opportunities come up.
Where the money would come from is obviously an issue, as Iran is not exactly the most appealing investment opportunity, so I have a hard time believing an investor will dump money into it without some sort of government (I.e. taxpayer) backing.
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u/brvheart 7h ago
I’m probably going to wait until we see the signed agreement before making a decision about how I feel. Thanks for the pre-outrage though, it’s helpful for societal unity.
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u/shacksrus 6h ago
About 1% of the economic output of every American man woman and child for a year.
I think the time to be outspoken is before the ink dries and no one can do anything about it.
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u/likeitis121 6h ago
I'd also like to know what was accomplished beforehand, because it sure seems like we burned several hundred billion as a distraction or for market manipulation.
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u/Wonderful_Cookie_572 6h ago
The sad part is that that is still a massive savings over continuing the war. Because that's how financially wasteful our military is. It's still a disaster in all real measures, but it's an EF3 instead of the EF4 that the ongoing war is.
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u/FosterFl1910 6h ago
No, the USA is not sending $300 billion of taxpayer money to Iran, even though the NYT seems to want to give readers that impression. It’s just an idea by Whitkoff to let American companies do business with Iran if Iran gives up their nuke program. The president can’t send that kind of taxpayer money to a foreign country without congressional approval.
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u/Tight_Contest402 4h ago
The president can’t send that kind of taxpayer money to a foreign country without congressional approval.
You're kidding right...
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u/FosterFl1910 4h ago
Show me a time a president sent taxpayer money to a foreign country that was not allocated by Congress. I’ll wait.
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u/NativeMasshole Maximum Malarkey 6h ago
This has been really simple from the start: We were never going to be able to win a conflict with Iran without a full invasion. Trump thought he could bully them with a bunch of half measures, and now we're in a worse position. The fact that he never wanted to fully commit to a war of that scale and is now willing to back out after we've significantly weakened our position only exemplifies how terrible his leadership is. The fact that he expects the American public to pay his way out of it is just the unsurprising icing on the cake.