In January 2016, the Obama administration successfully negotiated the release of four Americans who had been imprisoned in Iran in exchange for the release of seven Iranians who had been imprisoned in the United States. (A fifth American prisoner was released separately.) At around the same time, the U.S. airlifted the equivalent of USD$400 million in various currencies to Tehran, sparking conspiracytheories about the timing:House Speaker Paul D. Ryan (R-Wis.) was among those who seized on the timing and cloak-and-dagger delivery method, which was
first reported by the Wall Street Journal, saying it proved suspicions that the Obama administration had tried to hide a payment for the four Americans, including Washington Post reporter Jason Rezaian. GOP candidate Donald Trump called it an example of the administration’s foreign policy failures.“Obama administration sent plane load of cash to #Iran as ransom as part of deal on hostages. Just unreal,” tweeted Sen. Marco Rubio (R-Fla.), a long-standing critic of the Iran talks.
As with other issues that would normally fall by the wayside in a normal daily news cycle, the payout to Iran became prime fodder for yet another election-year debate:State Department spokesman John Kirby joined Bill Hemmer on "America's Newsroom" to defend a $400 million cash transfer to Iran during the release of four Iranian-held U.S. hostages.Kirby said the money had been frozen in a trust fund in the U.S. for decades and it was "their money."He asserted that the fact that the transaction occurred during the release of the detained Americans was "coincidental." Hemmer pressed Kirby, saying that it appears that this cash transfer was kept secret and was effectively a "ransom.""It looks bad," Hemmer said.
In reality, however, the money transfer was the result of a settlement of a long-standing claim at the Iran-U.S. Claims Tribunal in The Hague around the same time that the prisoners were released. The Tribunal was created specifically to deal with diplomatic relations between Iran and the United States:The Iran-United States Claims Tribunal (IUSCT) came into existence as one of the measures taken to resolve the crisis in relations between the Islamic Republic of Iran and the United States of America arising out of the detention of 52 United States nationals at the United States Embassy in Tehran which commenced in November 1979, and the subsequent freeze of Iranian assets by the United States of America.
The money transfer was heavily covered at the time, complete with comments from the White House itself. The 19 January 2016 White House daily briefing from Josh Earnest includes information about the money:Q. Thank you very much. Appreciate it, Josh. On Sunday, we learned that the United States made a payment to the government of Iran of $1.7 billion. Was this tied to the deal that led to the freedom of the Americans that were being held in Iran?A. Jon, this is actually the result of a long-running claims process that had been at The Hague. In 1979, there was obviously an Iranian revolution that abruptly severed relations between our two countries. And prior to that revolution, the U.S. government had entered into an agreement with the then-Iranian government to transfer about $400 million in military equipment to the Iranian government. Once the revolution took place, obviously that equipment was not transferred, but we also didn't return Iran's money either. So that money essentially was held in what could, I think -- essentially in an escrow account.And for more than 30 years now, the Iranians have been using this claims process at The Hague to try to recover that $400 million.This resolution that we agreed to was to return the $400 million and also to pay about $1 billion in interest. Now, the reason that this ends up being a very good deal for taxpayers is that our exposure, when it came to paying interest, could have been much higher. The Iranians were actually seeking $7 billion to $8 billion in interest payments. And I think that's an indication of how the interests of taxpayers were very well served by reaching this settlement.
The process leading up to the extensively and delicately negotiated settlement was also covered in detail by major news organizations at the time:The United States is to repay Iran a $400 million debt and $1.3 billion in interest dating to the Islamic revolution, Secretary of State John Kerry said Sunday.The repayment, which settles a suit brought under an international legal tribunal, is separate from the tens of billions of dollars in frozen foreign accounts that Iran can now access after the end of nuclear sanctions.But the timing of the announcement, one day after the implementation of the Iran nuclear accord, will be seen as pointing to a broader clearing of the decks between the old foes.
The fact that the money was physically sent to Iran in various currencies rather than simply transferred by wire may seem odd in the context of the United States' increasingly cashless society, but that was done in order to avoid existing Treasury Department sanctions that banned the use of American currency in transactions with Iran, and international sanctions which at that time kept Iran from accessing the global financial markets (and which were lifted in January 2016).While the timing could appear to have been a suspiciously coordinated quid pro quo, the evidence points to a paper trail of years of exhaustive hearings and highly sensitive negotiations that were completely separate from the January 2016 prisoner exchange.