Obama administration denies Iran cash payment was a ransom

WASHINGTON

Jason Rezaian

The Obama administration said on Aug. 3 that $400 million in cash paid to Iran soon after the release of five Americans detained by Tehran was not ransom as some Republicans have charged. 

The five, including Washington Post reporter Jason Rezaian, were released on Jan. 16 in exchange for seven Iranians held in the United States for sanctions violations. The prisoner deal coincided with the lifting of international sanctions against Tehran. 

At the time, the United States said it had settled a longstanding Iranian claim at the Iran-U.S. Claims Tribunal in The Hague, releasing $400 million in funds frozen since 1981, plus $1.3 billion in interest that was owed to Iran. 

The funds were part of a trust fund Iran used before its 1979 Islamic Revolution to buy U.S. military equipment that was tied up for decades in litigation at the tribunal. 

Representative Jason Chaffetz, chairman of the House of Representatives Committee on Oversight and Government Reform, on Aug. 3 sent a letter to U.S. Secretary of State John Kerry asking him to appear at a future committee hearing to discuss the payment. 

White House spokesman Josh Earnest rejected suggestions the money transfer to Iran was ransom or a secret. 

“The United States, under President Obama, has not paid a ransom to secure the release of Americans unjustly detained in Iran and we’re not going to pay a ransom,” he said in response to a Wall Street Journal article that said Washington secretly organized the cash airlift. 

Earnest said Republicans, who have long opposed the Iran nuclear deal, are seizing on how the money was paid to Iran as a way to undermine the deal. “They’re struggling to justify their opposition to our engagement with Iran,” he told a briefing. 

While there have long been questions about the timing of the payment, one Iranian concern was that the Obama administration could face too much domestic political criticism if it delayed acting on the tribunal’s decision. 

Due to international sanctions against Iran, the payment, made in euros, Swiss francs and other currencies, had to be made in cash, U.S. officials argue. 

One U.S. official said the $1.3 billion in interest was paid to Iran through the U.S. Treasury-administered Judgment Fund, which is used to pay awards against the United States. 

Senior officials at the Justice Department had objected to sending cash on a plane to Iran at the same time that Iran was releasing four imprisoned Americans (the fifth American was released separately) but were overruled by the State Department, The Wall Street Journal reported in a separate story on Aug. 3, citing people familiar with the discussions. 

“People knew what it was going to look like, and there was concern the Iranians probably did consider it a ransom payment,” the newspaper quoted one of the people as saying.
 
Justice Department prosecutors were also concerned that the United States would release too many Iranian convicts and drop too many pending criminal cases against people suspected of violating sanctions laws, the second Wall Street Journal report said. 

In response to the report, a Department of Justice spokesman said in a statement: “The Department of Justice fully supported the ultimate outcome of the Administration’s resolution of several issues with Iran, including Hague settlement efforts, as well as the return of U.S. citizens detained in Iran. We will not comment further on internal interagency deliberations.”