President Barack Obama said on Aug. 4 that the $400 million cash payment to Iran, which coincided with the release of four Americans held prisoner in Tehran, was not a ransom.
His response follows a report from The Wall Street Journal earlier this week on the Obama administration airlifting the money in an unmarked cargo plane in January at the same time the four U.S. citizens were released.
U.S. officials say the $400 million was the first installment of a settlement the Obama administration reached with Iran to solve a decades-old dispute over a failed arms deal signed just before the 1979 overthrow of Shah Mohammad Reza Pahlavi. The settlement, which was resolved before an international tribune, occurred on the same weekend the United States and other global powers brokered a nuclear deal with Iran. In response to the release of the Americans, the U.S. released seven Iranian citizens and dropped extradition requests for 14 others at the time.
“We announced these payments in January,” said Obama in a live-streamed conference, “It wasn’t a secret.”
Obama said that at the time his administration had explained that Iran had taken claims before an international tribunal and because of litigation risks the United States made a $1.7 billion settlement with the country to resolve the dispute following legal advice and suggestions.
“With the nuclear deal done, prisoners released, the time was right to resolve this dispute as well,” President Obama said on Jan. 17.
Although he did not disclose the $400 million cash payment at the time, Obama did suggest the United States would give money to Iran.
“The United States and Iran are now settling a longstanding Iranian government claim against the United States government. Iran will be returned its own funds, including appropriate interest, but much less than the amount Iran sought,” said Obama in January.
“For the United States, this settlement could save us billions of dollars that could have been pursued by Iran,” he added.
“We don’t pay ransom for hostages,” Obama said on Thursday, adding that Americans are held prisoners around the world and that “we won’t pay ransoms in the future.”
The president said the notion of paying a ransom to Iran in that manner and so publicly “defies logic.”
Obama says the reason why the payment coincided with the release of prisoners and the nuclear deal was because the United States and Iran were having diplomatic conversations for the first time in decades. The president also clarified that the reason why the money was given in cash was because the United States is “so strict in maintaining sanctions” and because the country has “no banking relationship” with Iran.
Meanwhile, a separate report from the Wall Street Journal says senior U.S. Department of Justice (DOJ) officials objected to sending the $400 million in cash to Iran at the same time the country released the detained Americans.
“People knew what it was going to look like, and there was concern the Iranians probably did consider it a ransom payment,” a source close to the discussions told the Wall Street Journal.
The DOJ did not object to the $1.7 billion settlement with Iran. However, the Justice Department was concerned about other deals with Iran. Prosecutors were uneasy about the United States’ release of Iranian convicts and dropping too many pending criminal cases against individuals suspected of violating sanctions, the report said.
Nonetheless, the DOJ “fully supported the ultimate outcome of the administration’s resolution of several issues with Iran,” including the settlement “as well as the return of U.S. citizens detained in Iran,” a Department of Justice official told the Wall Street Journal.
The release of the prisoners was portrayed as a diplomatic breakthrough by Secretary of State John Kerry and the Obama administration. The Americans who were released included Washington Post journalist Jason Rezaian, Idaho pastor Saeed Abedini, and former Marine Corps Sergeant Amir Hekmati.