What You've Been Told vs What Actually Happened

Heroic Flexibility

by Iran Prism 12 min read

As Long as Iran Has Money

In June 2016, six months after Implementation Day — the day the JCPOA’s nuclear restrictions took effect and sanctions began lifting — Hassan Nasrallah delivered a speech that would haunt the deal’s architects for a decade.

“The budget of Hezbollah, its salaries, its expenses, its food, its drink, its weapons and its missiles come from the Islamic Republic of Iran,” he said. And then the line that mattered: “As long as Iran has money, we have money.”1

Two weeks later, at the World Economic Forum in Davos, John Kerry was asked whether sanctions relief would fund terrorism. The US Secretary of State — the man who had spent years negotiating the deal — answered with a candor that would have been unthinkable during the sales pitch: “I think that some of it will end up in the hands of the IRGC or other entities, some of which are labeled terrorists. You know, to some degree, I’m not going to sit here and tell you that every component of that can be prevented.”2

President Obama had said the same thing, more carefully, months before signing: “I think it is a mistake to characterize our belief that they will just spend it on daycare centers, and roads, and paying down debt.”3

The deal’s own architects knew. They signed it anyway. This article examines what the regime did with the pause they purchased — and whether the price was worth paying.

The Wrestler

The phrase that explains the JCPOA from the regime’s perspective predates the deal by two decades.

In 1996, Ayatollah Khamenei first used the term “heroic flexibility” (نرمش قهرمانانه) before Interior Ministry officials. The concept traced to his own translation of a book about Imam Hassan’s seventh-century tactical truce with a hostile rival. When he revived it in September 2013 to authorize nuclear negotiations, his framing was explicit: “A wrestler sometimes shows flexibility for technical reasons. But he should not forget who his opponent and enemy is.”4

This was not ambiguity. It was doctrine.

In May 2023, Khamenei made it even clearer, comparing heroic flexibility to taqiyya — the Islamic concept of concealing one’s true beliefs to achieve a goal. He told Foreign Ministry officials that when a revolution hits a “tough rock” on its path, “it need not break its head against it; the wisest course would be to try and go around it.”5

Former President Khatami disclosed the underlying logic in a private meeting: Khamenei had told him directly that “Iran needs enmity with America. The revolution needs enmity with America.”6 Karim Sadjadpour of Carnegie assessed that Khamenei “carefully telegraphed that heroic flexibility did not portend a grand bargain with the United States, but merely a temporary, tactical compromise to reduce sanctions and stave off economic pressure.”

The Zarif tape of 2021 demolished whatever remained of the moderate-power thesis. Foreign Minister Zarif — the face of Iranian moderation to the Western world — stated that his role in determining Iran’s foreign policy was “nil.” He said diplomacy was consistently “sacrificed” for IRGC military operations. He revealed that Qasem Soleimani directed foreign policy and actively attempted to sabotage the JCPOA, traveling to Moscow in July 2015 — immediately after the deal’s signing — as part of a broader plan to “demolish” it.7

Khamenei’s response was more revealing than the tape itself. He reprimanded Zarif, then asserted: “The foreign policy of Iran is not crafted by the foreign ministry, and is merely enforced by it.” This was not damage control. It was doctrinal clarification.

The Ledger

The financial forensics of the JCPOA era are documented in IMF fiscal data, Treasury testimony, and Iran’s own budget documents. They tell a precise story.

Iran’s oil exports recovered from roughly 1.1 million barrels per day under sanctions to 2.1–2.5 million bpd by 2017. Combined with recovering oil prices, this translated into a fiscal delta of roughly $37 billion per year in additional oil revenue.8 Iran gained between $50–56 billion in accessible unfrozen assets. GDP surged 12.5 percent in 2016 — the largest single-year jump in modern Iranian history.

Where did the money go?

The JCPOA-Era Allocation:

CategoryBefore JCPOADuring JCPOAChange
Hezbollah funding$100–200M/year$700–830M/year3.5–4× increase
Fatemiyoun Division (Afghan fighters)~1,000 fighters15,000+ fighters15× expansion
Zainabiyoun Brigade (Pakistani fighters)~24 militants~5,000 fighters200× expansion
Defense spendingSanctions-era baseline+30% over 2 yearsHighest in two decades
Defense credit guaranteesBaseline2.5× by 2017, 4× by 2018Rouhani’s own defense minister
Hamas fundingFrozen (2012–2016)Resumed at ~$100M/yearRe-engaged after Syria estrangement

After sanctions were reimposed from 2018 to 2020, military spending fell 22 percent from its 2017 high.9 This correlation — spending up with relief, down with reimposition — is the single most powerful datapoint supporting the fungibility argument. The defense spending tracked fiscal capacity with the precision of a dial.

The IRGC Quds Force budget remains opaque by design. It reports directly to Khamenei, not to elected government, and operates substantially off-budget. Khatam al-Anbiya, the IRGC’s engineering arm, held oil and petrochemical contracts worth $22 billion — four times the official IRGC budget. This economic empire meant the IRGC could sustain baseline operations even under severe sanctions. But it could expand them dramatically when fiscal constraints loosened.10

Iran’s FATF record provides the most revealing evidence of intent. After the JCPOA, Iran committed to a FATF Action Plan — then never completed it. Iran’s Expediency Council, where IRGC-aligned hardliners hold decisive influence, blocked ratification of the Palermo Convention and Terrorist Financing Convention. An Iranian official admitted in October 2020: “All these transactions and financial transfers are being carried out in a hidden manner. If we join FATF commitments, we will be held accountable before the FATF executive about where the imports came from and where the exports went.”11 The IRGC vetoed the transparency that would have exposed proxy funding channels.

The Signing Year

The human rights record during the JCPOA’s negotiation and implementation represents the most uncomfortable data point for the thesis that diplomacy moderates regimes.

In 2015 — the year the deal was signed — Iran executed at least 972 people, the worst annual execution count in over 25 years.12 Among them were men and women whose families learned of the executions by phone, sometimes days after the fact. The majority — 642 — were killed for drug offenses under mandatory sentencing laws that human rights organizations had condemned for years. UN Special Rapporteur Ahmed Shaheed assessed that “in terms of human rights, there has been no sign of improvement” under Rouhani, concluding that “Iranians are worse off” than under Ahmadinejad.

Under “moderate” President Rouhani’s full tenure (2013–2021), Iran executed at least 4,249 people — averaging 44 per month compared to Ahmadinejad’s 35 per month.13

The Obama administration explicitly delinked human rights from nuclear negotiations. The JCPOA dealt exclusively with nuclear issues; human rights, ballistic missiles, regional proxy support, and hostage-taking were all excluded at Iran’s insistence. Iran refused to allow any UN human rights official to visit the country throughout Rouhani’s presidency.

Iran Human Rights documented a pattern: execution rates typically decreased before elections and during religious holidays, then spiked after elections and during nuclear negotiations — suggesting the regime calculated that the West would not jeopardize nuclear talks over executions.14

By 2019, even Rouhani abandoned the economic framing he had used to sell the deal domestically. He stated that if Iran held to the JCPOA, “the weapons sanction will be lifted next year, and we can easily purchase and sell weapons.”15 The transformation from economic promise to military enabler was complete. Rouhani’s own nuclear negotiation history revealed the doctrine’s continuity: during the 2003–2005 suspension, as chief nuclear negotiator, he had boasted on Iranian television: “While we were talking with the Europeans in Tehran, we were installing equipment in Isfahan… We halted it?! We completed the technology! We created the opportunity!”16

What the Inspectors Missed

The JCPOA’s verification regime was the most intensive ever applied to a single country. Continuous monitoring cameras. Online enrichment monitors. Electronic seals. Quarterly inspections. And at declared sites, Iran complied — enrichment below 3.67 percent, stockpile below 300 kg, 5,060 IR-1 centrifuges, Fordow free of uranium, Arak reactor core filled with concrete.17

But the verification system structurally could not address three problems.

First, the Mossad archive — seized in January 2018 from a Tehran warehouse — revealed that Iran had stored undeclared nuclear material and weapons documentation throughout the JCPOA period. The Turquzabad warehouse contained equipment with nuclear contamination from 2009 to 2018. Iran sanitized it in summer 2018 after Netanyahu’s revelation. The IAEA found natural uranium particles of anthropogenic origin — despite the sanitization. Iran’s explanations were deemed “not technically credible.”18

Second, Section T of the JCPOA prohibited weaponization-related activities — computer modeling, explosive testing, detonator development. But as former IAEA Deputy Director General Heinonen noted, the quarterly reports showed no evidence of meaningful first-hand verification. The IAEA had not visited any military site since Implementation Day, despite Iranian officials declaring such sites off-limits.19

Third, the PMD investigation — twelve areas of concern — was politically closed in December 2015 with only two issues even partially resolved. On ten issues, Iran either refused, denied, or offered unverifiable explanations. Iran never admitted to having a weapons program. The file was closed to enable JCPOA implementation — a trade-off the deal’s supporters acknowledged was necessary but that left the baseline understanding incomplete.

The deal verified what it was designed to verify. It did not — because it structurally could not — verify whether Iran had abandoned or merely shelved its weapons ambitions.

The Counterfactual

The strongest defense of the JCPOA rests on a question its critics never answered convincingly: compared to what?

The deal extended breakout time from two to three months to over twelve months. Iran shipped out 25,000 pounds of enriched uranium — a 97 percent stockpile reduction. The Arak reactor’s plutonium pathway was physically eliminated. Sixty-seven former Israeli military and intelligence officials publicly supported the deal, including former Mossad head Efraim Halevy and Netanyahu’s own former national security advisor, Uzi Arad, who stated: “Doing away with the agreement simply removes from existence something tangible — and replacing that with nothing.”20

Maximum pressure produced devastating economic results — reserves fell from $70 billion to $4 billion, oil exports dropped to under 500,000 bpd, the economy contracted nearly 12 percent — but it failed to produce a new agreement and triggered Iran’s most aggressive nuclear escalation in history.21 From JCPOA compliance to 60 percent enrichment in under three years. The deal’s opponents destroyed the one framework that was constraining the program and replaced it with nothing.

Both of these things are true. The JCPOA achieved real nuclear containment. Maximum pressure failed.

And both of these things are also true: the defense spending elasticity — up 30 percent with relief, down 22 percent without it — is the clearest proof that sanctions relief funded military expansion. Gary Samore, former White House Arms Control Coordinator, captured the structural impossibility: “No diplomatic agreement can solve the problem as long as the current government rules in Tehran.”22

The reason is architectural. Under velayat-e faqih, the Supreme Leader holds authority derived from God as deputy to the Hidden Imam. His mandate is divine; elections and popular participation are structurally subordinate. The IRGC, Guardian Council, judiciary, and Assembly of Experts can each veto reform. The Soviet system could produce a Gorbachev because the Politburo was the ultimate source of legitimacy and could authorize its own transformation. Velayat-e faqih cannot, by design. There is no mechanism within the Islamic Republic for the kind of fundamental change that would make a nuclear agreement durable.23

The technique that shapes how most people think about the JCPOA has a name: the “deal or war” false dichotomy — framing the choice as either supporting the deal exactly as written or endorsing military conflict. The actual policy space includes longer verification horizons, permanent monitoring, enrichment limitations without sunset clauses, conditionality on human rights, and maintained leverage throughout implementation. The false dichotomy prevents exploring that space.

The Honest Ledger

The JCPOA achieved real nuclear containment. This is not disputed by serious analysts on any side. Iran complied with quantitative enrichment limits at declared sites for over two years. The breakout time extension was genuine. The plutonium pathway elimination was physical and verified. Every IAEA quarterly report confirmed compliance. The deal worked on its own nuclear terms.

And the regime treated it as a tactical pause — exactly as Khamenei’s doctrine prescribed.

Defense spending increased 30 percent. Hezbollah funding quadrupled. The Fatemiyoun grew from a thousand fighters to a division. The FATF Action Plan was sabotaged from within. 972 people were executed in the signing year. Rouhani, by 2019, abandoned the economic framing entirely and spoke of weapons purchases. The Zarif tape confirmed what the spending data already proved: the moderate president controlled nothing that mattered.

The JCPOA era coincided with some of the most devastating military operations in the modern Middle East. The UN estimated 306,887 civilian deaths in Syria from 2011 to 2021, with Iranian-backed forces serving as core ground units in the siege of Aleppo, the destruction of eastern Ghouta, and operations across five governorates.24 Whether those operations would have occurred without JCPOA sanctions relief is the right counterfactual question. The honest answer: they would have — but at reduced scale and capability. The 30 percent defense spending increase, the Fatemiyoun expansion from 1,000 to 15,000+, and the 22 percent spending decline when sanctions returned all indicate that fiscal capacity directly influenced operational scope.

The nuclear pause was purchased. The question no one answered: what would the regime do with the pause? The answer is documented in the rubble of Aleppo, the body count in Syria, the rockets stockpiled in Lebanon, and the 4,249 executions under the “moderate” president who signed the deal.

The regime instrumentalized Islamic theology itself — Khamenei’s comparison of heroic flexibility to taqiyya was not metaphor but method, using sacred concepts to justify strategic deception at the negotiating table. A regime that claims divine authority while concealing weapons programs and funding foreign wars in the name of God has desecrated the faith it purports to protect.

Nasrallah was killed in September 2024 — by strikes on infrastructure funded during the JCPOA era. The deal bought a nuclear pause. The pause bought a war.

This article is part of The Nuclear Pursuit. For the American genesis of the nuclear program, see Atoms for the Shah. For the sabotage campaign and the concealment that preceded it, see The Shadow War.

Footnotes

  1. Hassan Nasrallah, Al Manar Television, June 2016; Al Arabiya and Times of Israel reporting ↩

  2. John Kerry, CNBC interview, World Economic Forum, Davos, January 2016 ↩

  3. President Obama, White House press conference, July 15, 2015 ↩

  4. Khamenei speech to IRGC commanders, September 2013; Washington Institute analysis ↩

  5. Khamenei speech to Foreign Ministry officials, May 2023; Washington Institute, Omer Carmi analysis ↩

  6. Karim Sadjadpour, Carnegie Endowment for International Peace, quoting Khatami’s disclosure ↩

  7. Zarif leaked audio, April 2021; Iran Primer, USIP; CNN; Arab News reporting ↩

  8. IMF fiscal data; US Energy Information Administration; Council on Foreign Relations backgrounder ↩

  9. Washington Institute for Near East Policy, defense spending analysis; Congressional testimony, House Financial Services Committee ↩

  10. Treasury designation, Khatam al-Anbiya Construction Headquarters; Janes defense analysis ↩

  11. Congressional testimony, House Financial Services Committee, October 2023; FATF blacklist status reports ↩

  12. Iran Human Rights annual report, 2015; Shabtabnews execution statistics ↩

  13. Iran Human Rights, “Execution Trends During Rouhani Presidency,” cumulative data ↩

  14. Iran Human Rights, correlation analysis of execution rates and political events ↩

  15. Hassan Rouhani, quoted in Washington Institute for Near East Policy analysis, 2019 ↩

  16. Hassan Rouhani, Supreme Cultural Revolution Council speech, 2004; Iranian television interview, 2013 ↩

  17. IAEA Board of Governors Reports, GOV/2016/55 through GOV/2018/47; Arms Control Association verification summaries ↩

  18. IAEA, GOV/2025/25; Institute for Science and International Security, Turquzabad analysis ↩

  19. Olli Heinonen testimony; Institute for Science and International Security, Section T verification analysis ↩

  20. Arms Control Center, Israeli security official statements; Uzi Arad quoted in Boston Globe, 2017 ↩

  21. RAND Corporation; Foreign Affairs, Salehi-Isfahani analysis; Arms Control Association status reports ↩

  22. Gary Samore, Harvard Belfer Center; Carnegie Endowment conference remarks ↩

  23. Institute Global, “What Is Velayat-e Faqih?”; Karim Sadjadpour, “The Ayatollah Machiavelli,” Hoover Institution ↩

  24. UN OHCHR, civilian death estimate, March 2022; Syrian Observatory for Human Rights, combatant statistics ↩