August 4, 2016
The White House has rejected a charge from Republican leaders that it secretly paid Iran $400 million in cash in January as ransom for the release of imprisoned Americans.
The payment, which settled a decades-old reimbursement claim by Tehran for a cancelled U.S. arms deal, was delivered a day after five American prisoners in Tehran were released on January 16 as part of a prisoner exchange.
The Wall Street Journal reported on August 3 that the administration secretly airlifted the money in cash in multiple currencies to Iran — a revelation that prompted Republican presidential candidate Donald Trump and other GOP leaders to charge that the payment amounted to a ransom for the prisoners.
“The United States, under President [Barack] Obama, has not paid a ransom to secure the release of Americans unjustly detained in Iran,” White House spokesman Josh Earnest said on August 3. “It is against the policy of the United States to pay ransom for hostages.”
Earnest did acknowledge, however, that the administration secretly airlifted the cash to Tehran. He said the payment was made in cash because the United States does not have a banking relationship with Iran.
The administration said in January that the five American prisoners who were freed on January 16, including Washington Post reporter Jason Rezaian, were released in exchange for seven Iranians held in the United States for sanctions violations.
The prisoner exchange and the $400 million claims payment also came at the same time as the lifting of international sanctions against Tehran on January 17.
At the time, the United States said the payment settled a long-standing Iranian claim at the Iran-U.S. Claims Tribunal in The Hague for reimbursement of $400 million in military weapons ordered by the shah of Iran that were never delivered after the shah was deposed by the Islamic Revolution in 1979.
As part of a negotiated settlement of The Hague case, the United States also agreed to provide Iran with another $1.3 billion in interest at a future date.
Republicans, including Trump, seized on the the paper’s revelation about the secret airlift of cash as evidence that the payment was a ransom for freeing prisoners, however.
Senator John McCain said the timing of the payment suggested it was a ransom that has now incentivized more bad behavior from Iran.
“If true, this report confirms our long-standing suspicion that the administration paid a ransom in exchange for Americans unjustly detained in Iran,” House Speaker Paul Ryan said. “It would also mark another chapter in the ongoing saga of misleading the American people to sell this dangerous nuclear deal.”
Representative Jason Chaffetz, the chairman of the House Oversight Committee, demanded that U.S. Secretary of State John Kerry appear before his panel to explain the payment.
Trump sought to tie the payment to his Democratic opponent in the White House race, saying in a tweet, “Our incompetent Secretary of State, Hillary Clinton, was the one who started talks to give 400 million dollars, in cash, to Iran. Scandal!”
Moreover, Trump sought to tie the payment to Iran’s release of 10 American sailors who had veered off course in the Persian Gulf and been taken prisoner for one day by Iran’s Revoluationary Guards on January 12 — five days before the payment was delivered.
“It looks like we paid $400 million for the hostages,” Trump said.”When they took our sailors, they forced them to their knees and the only reason we got them back is that we hadn’t paid the money yet. And that’s the only reason we got ’em back. Otherwise, they would’ve had to wait until I became president.”
Trump added that he believes the “terror money airlift [will] undoubtedly find its way into the hands of terrorists.”
While there have long been questions about the timing of the $400 million payment, one Iranian concern was that the Obama administration could face too much domestic political criticism if it delayed acting on The Hague settlement.
Moreover, U.S. officials argue that they had to make the payment in euros, Swiss francs, and other currencies due to restrictions on providing Iran with U.S. dollars under U.S. sanctions targeting Iran’s support for terrorist groups.
AP, Reuters, APF, RFE