The US government is said to have airlifted $400 million worth of cash to Iran in a secret operation that coincided with the release in January of four Iranian-American prisoners held by the Islamic Republic, including the Washington Post correspondent Jason Rezaian.
An Obama administration spokesman denied any link between the payment and the release of the prisoners.
According to the Wall Street Journal late Tuesday, the funds were procured from banks in Switzerland and the Netherlands and were flown in euros, Swiss francs and other currencies in an unmarked cargo plane into Iran. Since a transaction with Iran in US dollars is illegal under US law, Secretary of State John Kerry and other officials sought the help of the Dutch and the Swiss and then transferred the equivalent of the sum to their central banks.
Citing US and European officials and congressional staff briefed on the secret operation after-the-fact, the Journal reported that the money was the first installment of a $1.7 billion settlement deal between Iran and the US to resolve a disputed arms deal just before the 1979 Islamic Revolution and the fall of the shah.
The Iranian claims were brought before an international tribunal at The Hague, where Iran was seeking $10 billion.
The settlement also coincided with the implementation of the contested Iranian nuclear deal, reached between the world powers and Iran last summer, that aims curb Tehran’s atomic program and bring it under international supervision in exchange for easing punishing sanctions on Iran.
Critics have argued that the influx of cash would only be directed to funding Iran’s terrorism activities worldwide. A June US State Department report on global terrorist activity listed Iran as the top state sponsor of terrorism.
“As we’ve made clear, the negotiations over the settlement of an outstanding claim…were completely separate from the discussions about returning our American citizens home,” State Department spokesman John Kirby told the Wall Street Journal. “Not only were the two negotiations separate, they were conducted by different teams on each side, including, in the case of The Hague claims, by technical experts involved in these negotiations for many years.”
But the Iranians have boasted of their pressure on the Americans to hand over the cash for the prisoners.
“Taking this much money back was in return for the release of the American spies,” General Mohammad Reza Naghdi, commander of the Guard’s Basij militia, said on state media at the time.
According to the Iranian news agency Tasnim, the money arrived in Iran on the same day the prisoners departed n January 17.
One Republican senator, Tom Cotton, from Arkansas accused President Barack Obama of paying “a $1.7 billion ransom to the ayatollahs for US hostages,” according to the report.
“This break with longstanding US policy put a price on the head of Americans, and has led Iran to continue its illegal seizures,” he said.
In exchange for the four Americans, the US released seven Iranian nationals and dropped extradition requests for 14.
Since their release, Iran has detained three more Iranian-American dual nationals, including an elderly man, on unknown charges.
The three are believed to be Iranian-American Reza Robin Shahini who was visiting family in Iran last month, energy executive Siamak Namazi and his 80-year old father, Baqer. Iran does not recognize dual nationalities, which means they cannot receive consular assistance.
Another three dual nationals and a Lebanese man have also been detained in Iran in recent months. The four, who have ties to Britain, Canada and the United States, all are believed to have been detained by Iran’s Revolutionary Guard Corps.
Congress members are now seeking to make public details of the cash deal with Iran and the $1.7 billion settlement by passing a bill that would prevent the Obama administration from making any further payments to Iran.
“President Obama’s…payment to Iran in January, which we now know will fund Iran’s military expansion, is an appalling example of executive branch governance,” said Republican Senator James Lankford from Oklahoma, who co-wrote the bill.
“Subsidizing Iran’s military is perhaps the worst use of taxpayer dollars ever by an American president,” he said.
AP contributed to this report.