U.S. Says $400 Million to Iran Was Used as Prisoner Leverage

EghtesadOnline: The U.S. withheld a $400 million cash payment to Iran earlier this year as leverage to ensure the country would release American prisoners as promised, State Department spokesman John Kirby said, further fueling criticism that the delivery was effectively a ransom.

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20 August 2016

“We were able to conclude multiple strands of diplomacy within a 24-hour period,” Kirby told reporters in Washington on Thursday. “We deliberately leveraged that moment.”

Kirby was responding to a report in the Wall Street Journal that the U.S. wouldn’t let Iran take control of the money -- owed as part of a $1.7 billion settlement of a decades-long dispute over weapons deals -- until a plane carrying the American prisoners left the Islamic Republic in January, according to Bloomberg.

Disputes over the timing of that payment have added to criticism of the administration’s nuclear deal with Iran, which went into effect hours earlier. While the U.S. has said talks over the release of the prisoners were held separately from last year’s negotiations on the payment and on the nuclear accord, Kirby’s comments was an acknowledgment that those three issues eventually converged.

Weapons Purchase

The payment marked the resolution of a dispute over returning Iranian funds from a weapons purchase placed by the government of Shah Mohammed Reza Pahlavi before he was ousted. The U.S. delivered the $400 million the same day sanctions were lifted on Iran as part of the nuclear agreement. Hours earlier, Iran had released the prisoners, who included Washington Post reporter Jason Rezaian and scholar Matthew Trevithick. The U.S. also returned several prisoners to Iran.

As President Barack Obama did earlier this month, Kirby rejected accusations that the payment amounted to a ransom. He said the nuclear negotiations, the settlement discussions and the talks over the prisoner release were happening on separate diplomatic tracks but the U.S. had become concerned that Iran “may renege on the prisoner release.”

‘Troubling Concessions’

The acknowledgment produced a quick response from Republicans on Capitol Hill. Doug Andres, a spokesman for House Speaker Paul Ryan, said Obama “owes the American people a full and honest accounting of the ransom payment made in January.”

That followed comments earlier in the day by Senator Rob Portman, a Republican from Ohio, who said the Obama administration had made “troubling concessions” to Iran.

“In addition to rewarding Iran with tens of billions in sanctions relief, it’s now clear that this administration made ransom payments to Iran in order to free several hostages, demonstrating to the world that taking American hostages can be a lucrative business,” Portman said.