White House Says $400M Payment to Iran Was Not a Ransom

"It is against the policy of the United States to pay ransom for hostages."

ByJustin Fishel and Jordyn Phelps
August 03, 2016, 2:18 PM

— -- The White House is batting back at the suggestion that United States’ payment of $400 million in cash to Iran — a payment that coincided with the release of four American prisoners in January — was to pay a ransom.

“No, it was not,” White House press secretary Josh Earnest said firmly on whether the cash transfer amounted to a ransom payment. “It is against the policy of the United States to pay ransom for hostages.”

Earnest was peppered with questions throughout Wednesday’s press briefing about the cash transfer, first reported on by The Wall Street Journal. Two senior U.S. officials confirmed to ABC News that the $400 million was paid to Iran in euros, Swiss francs and other foreign currencies and was delivered to Tehran via a private non-U.S. aircraft.

The officials would not elaborate on the time frame of the payment, other than to say it came together within 36 hours of the prisoner release and lifting of sanctions as part of the nuclear agreement.

Earnest told reporters that the $400 million was money that the Iranian government under the shah paid into a U.S. account in 1979 as part of a transaction to procure military equipment. The equipment was never provided, Earnest said, because the shah was overthrown.

“So that was the right decision,” Earnest said. “It’s also why it was hard for the United States to make an argument in this case that we can just keep the money. So what the United States did was resolve a longstanding claim at The Hague that saved the American people potentially billions of dollars.”

In addition to the $400 million, there is an additional $1.3 billion in accumulated interest owed to Iran. The two officials would not elaborate on how or whether all the interest owed has been paid to Iran. But unlike the 400 million, that money would come from taxpayer-funded U.S. government accounts.

As for why the payment was made in cash, Earnest said, “The fact of the matter is that the U.S. doesn’t have a banking relationship with Iran” because of continued concerns about Iran’s “nefarious” behavior in the realm of terrorism and human rights, among other issues.

He declined to confirm the details reported by The Wall Street Journal — such as “Wooden pallets stacked with euros, Swiss francs and other currencies were flown into Iran on an unmarked cargo plane” — deflecting questions about the nature of the delivery to the Treasury Department.

In explaining the overlap in this deal with the prisoner release, Earnest said that multiple agreements with Iran “came to a head at the same time” as parallel negotiations concluded.

Asked where the money went, Earnest said, “First of all, it’s Iranian money.”

“The bulk of the money we know has been going to shoring up their economic weakness, and that’s exactly what we predicted,” Earnest continued. He acknowledged that “it’s possible that some of the money” has been used by Iran to support Hezbollah and Bashar al-Assad’s regime in Syria.

House Speaker Paul Ryan issued a statement just before the White House briefing saying that a $400 million cash transfer to Iran would confirm “our longstanding suspicion that the administration paid a ransom in exchange for Americans unjustly detained in Iran.”

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