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VOA News

Last updated on: August 04, 2016 9:01 PM

U.S. President Barack Obama denied that a payment of $400 million in cash to Iran on the same day as a hostage release was "some nefarious deal," pointing out that the transfer was announced in January, a day after implementation of the U.S. nuclear deal with Iran.

"It wasn't a secret," he said. "We were completely open about it."

He said the one new piece of information, reported Tuesday by the Wall Street Journal, was that the payment was made in cash, in non-U.S. currencies, delivered in an unmarked plane.

Speaking at a news conference Thursday, Obama said there was a reason the payment was made in cash.

"The reason that we had to give them cash is precisely because we are so strict in maintaining sanctions and we do not have a banking relationship with Iran, so that we could not send them a check and could not wire the money," he said.

Earlier Thursday, Secretary of State John Kerry said the U.S. "does not pay ransom," in response to criticism of the payment on the same day Tehran released four American hostages.

Congressional criticism

U.S. officials said the January payment was partially to settle a decades-old dispute over an aborted arms deal. But critics, especially those who oppose the Iran nuclear deal, have termed it a ransom payment.

Florida senator Marco Rubio tweeted that the deal was "just unreal."

U.S. House Foreign Affairs Committee Chairman Ed Royce said in a statement that "paying ransom only puts more American lives in jeopardy. We already know the Iran nuclear deal was a historic mistake. It keeps getting worse."

House of Representatives Majority Whip Steve Scalise cited Iranian media reports quoting senior defense officials as saying they considered the cash as a ransom payment.

"By paying Iran $1.7 billion in what Iranian officials themselves are calling a ransom, the Obama administration is showing us once again how horrible their nuclear deal is for America's national security," he said in a statement. "It is an insult to American taxpayers that their hard-earned dollars are being literally airlifted by the hundreds-of-millions to the world's leading state sponsor of terror."

Republican vice presidential nominee Mike Pence tweeted Thursday, "The $400,000,000 ransom we gave to Iran that'll be used to sponsor terrorism could've provided 8,000 4yr scholarships to impoverished youths."

During a visit Thursday to Argentina, Secretary Kerry defended the move.

"The United States of America does not pay ransom and does not negotiate ransoms with any country — we never have and we're not doing that now," Kerry said. "It is not our policy. That's number one. Number two: This story is not a new story. This was announced by the president of the United States himself at the very time that this transaction and the nuclear deal was being put together."

The statement echoed one made earlier by White House spokesman Josh Earnest, who said that the only people arguing that the cash was a ransom payment are "right wingers in Iran and [U.S.] Republicans who don't like the [nuclear] deal."

The U.S. stacked the cash — in euros, Swiss francs and other currencies —on wooden pallets and flew it into Iran on an unmarked cargo plane. It was the first installment on a $1.7 billion settlement stemming from the failed U.S. weapons pact with Iran in 1979 just before its last monarch, Shah Mohammed Reza Pahlavi, was toppled. The U.S. dispatched the cash in foreign currencies because any transaction with Iran in dollars is illegal under U.S. law.

Hostage release

On the same day, last January 17, Iran released four Americans, includingThe Washington Post's Tehran bureau chief, Jason Rezaian; Marine veteran Amir Hekmati; Christian pastor Saeed Abedin; and a fourth man, Nosratollah Khosravi-Roodsari, whose disappearance had not been publicly known before he was freed.

The cash transfer and the release of the hostages came at the same time as Iran's deal with the United States and five other world powers restraining Tehran's development of nuclear weapons, along with the lifting of sanctions that had hobbled Iran's economy.

President Barack Obama said at the time, "With the nuclear deal done, prisoners released, the time was right to resolve this dispute as well," referring to the 37-year-old arms deal that was never carried out. But Obama did not disclose the $400 million payment, a fact revealed by The Wall Street Journalin a Wednesday story.

Iranian media reports have quoted senior defense officials as saying they considered the cash as a ransom payment.

U.S. Republican presidential candidate Donald Trump accused his Democratic challenger, Hillary Clinton, of complicity in the payment.

"Our incompetent Secretary of State, Hillary Clinton, was the one who started talks to give 400 million dollars, in cash, to Iran. Scandal!" Trump said on Twitter.

Later in the day, he wondered aloud if the money were being used inappropriately. "You see it, you don't believe it," he said. "Four hundred million in cash being flown in an airplane to Iran. I wonder where that money really goes by the way, right? I wonder where it really goes. Well, it went to either in their pockets, which I actually think more so, or toward terrorism — probably a combination of both."