Critics of the Obama administration’s dealings with Iran on Friday accused the White House and the State Department of lying about a $400 million cash payment to Iran in January in what officials now acknowledge was conditioned on freedom for American prisoners.
Republicans were among those who disparaged State Department spokesman John Kirby’s explanation Thursday that the money, part of a settlement for a claim Tehran had on its own assets frozen by Washington decades ago, was “leverage” to ensure a plane carrying three released American prisoners could leave the country. On several occasions in the past seven months, administration officials, including President Obama himself, insisted the two situations were separate and unrelated.
Kirby on Friday acknowledged there was at least some link.
“The only connection was at the endgame,” he said. “Iran was not behaving well. So a decision was made on the spot, given Iran’s behavior, that we should hold up on the $400 million.”
Many who have called the payment a ransom were not assuaged.
“The president and the State Department deceived us all, Congress and, more importantly, the American people,” said Rep. Mike Pompeo (R-Kan.), a member of the House Intelligence Committee. “What the State Department said is their effort to begin to address that.”
The controversy involves a negotiated settlement between Tehran and Washington over $400 million that Tehran placed in a trust fund in the 1970s to buy military equipment. When the Shah was overthrown in 1979 and hostages taken at the U.S. Embassy in Tehran, the United States froze the assets.
According to a senior administration official familiar with the talks, a special claims tribunal in The Hague was preparing to rule on Iran’s claim. At the same time, the official said, negotiations were being finalized to implement the Iran nuclear deal and the release of Americans who Washington considered unjustly detained, including Washington Post reporter Jason Rezaian.
The $1.7 billion settlement, including interest, was announced on Jan. 17, the same day the nuclear deal took effect and the five American prisoners were set free. What was not announced, however, is that the initial $400 million payment had already been made. Statements by Obama and Secretary of State John F. Kerry that day both said Iran “will receive” the money, a choice of tense suggesting it was in the future.
Another senior administration official, speaking on the condition of anonymity under the State Department’s rules, said decisions were being made on the fly, and in high drama, as negotiators feared the Iranians would renege on their promises and never let the Americans leave Iran.
The Iranian negotiators were unhappy that one of seven Iranians being freed from U.S. jails under a deal that released prisoners was refusing to accept a pardon if it meant he had to return to Iran.
“The Iranians thought we were playing a fast one with them; why would their guy not accept a pardon?” said the official, describing a pressure-cooker environment. The American prisoners were being held incommunicado at the airport, prevented from boarding the Swiss Air plane ready to fly them home. Rezaian’s wife and mother could not be located, and the Iranians had no idea where they were.
“Our contacts in Iran were acting in a manner that suggested the Americans might never leave Iran,” the official said. “We thought they might be returned to Evin Prison. It would have been irresponsible to move ahead with the subsequent payment. What we had hoped would be a very smooth, culmination day ended up being hardly that.”
For months, the State Department brushed off suspicions on Capitol Hill that the settlement was a ransom. But their concerns were bolstered after an Aug. 3 story in the Wall Street Journal revealed that $400 million, in foreign currency piled on pallets, had been given to Iran as the prisoners were released. State Department officials tried to quash the controversy.
“Reports of link between prisoner release & payment to Iran are completely false,” Kirby tweeted that day.
“The idea that this was all orchestrated as part of some kind of quid pro quo is just not accurate,” said deputy spokesman Mark Toner the next day.
“What I do, though, want to disassociate [is] the idea .... that there was some sort of tie between the two,” said spokeswoman Elizabeth Trudeau on Aug. 8.
On Wednesday, the Journal reported the United States delayed delivering the $400 million until it knew the U.S. prisoners — Rezaian, Marine Amir Hekmati and Pastor Saeed Abedini — were in the air. The next day Kirby called it leverage.
State Department officials still have refused to provide a detailed account of either the cash payment or the plane liftoff. They have said the $1.3 billion in interest has been fully paid, but have provided no details on when or how.
Critics say the lack of specifics, and the earlier statements denying any connection, back their belief the administration was covering up a ransom.
“The president and his administration have been misleading us since January about whether he ransomed the freedom of the Americans unjustly imprisoned in Iran,” said House Speaker Ryan in a statement Friday.
Mark Dubowitz, the head of the Foundation for the Defense of Democracies who has testified frequently before Congress criticizing the Iran nuclear deal, said the Americans using the $400 million to get their prisoners back was as much leverage as the Iranians using prisoners to get their money back.
“This is clearly a weak cover story to hide a ransom payment by an administration that concocted a quid pro quo scheme too cute by a half,” he said.
Kirby said Friday that the decisions made by stressed-out negotiators were proper, and critics were co-mingling separate agreements.
“The quid pro quo for the $400 million was they got their money, and we got a favorable negotiated interest rate,” he said.
“The quid pro quo for the prisoners was we got our guys back, and they got theirs back.
“But there was no linkage between the $400 million and the prisoners, except in time and space at the end game.”
CORRECTION: An earlier version of this article incorrectly identified senior administration officials as being in the State Department.