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State Dept. Calls Report Linking Payment To Iranian Prisoner Release 'False'

U.S. State Department Spokesman John Kirby speaks during a briefing at the State Department on Jan. 6.

The U.S. State Department is dismissing a newspaper report that links a $400 million cash payment to the release of American prisoners, including Washington Post journalist Jason Rezaian, by Iran.

The Wall Street Journal published a report today that said the U.S. put $400 million in euros, Swiss francs and other currencies on an airplane and handed it to Iranian officials. That payout, the Journal reported, "coincided with the January release of four Americans detained in Tehran."

Of course, what the newspaper is implying with its reporting is that the United States paid ransom for the release of prisoners. In fact, Sen. Tom Cotton makes that accusation in the piece, saying the move broke with U.S. policy and "put a price on the head of Americans."

In a tweet, State Department spokesman John Kirby said those reports were "completely false."

He linked to a speech given by President Obama in January. In it, Obama announced that four Americans had been freed by Iran as part of a prisoner exchange. The president also noted that Iran and the United States had decided to settle a claim Iran launched against the U.S. in an international tribunal.

Right before the 1979 Iranian revolution, the previous regime had paid the United States $400 million to purchase American fighter jets, the Journal reported. The Iranians had demanded that money back with interest.

As NPR's Michelle Kelemen reported back in January, the U.S. agreed to pay back the $400 million plus $1.3 billion in interest.

Here's how Obama explained it in his speech at the time:

"Since 1981, after our nations severed diplomatic relations, we've worked through a international tribunal to resolve various claims between our countries. The United States and Iran are now settling a long-standing Iranian government claim against the United States government. Iran will be returned its own funds, including appropriate interest but much less than the amount Iran sought. For the United States, this settlement could save us billions of dollars that could have been pursued by Iran, so there was no benefit to the United States in dragging this out. With your nuclear deal done, prisoners released, the time was right to resolve this dispute as well."

The Journal piece also says that the reason the U.S. paid in foreign currency is because U.S. law prohibits any transactions with Iran using U.S. dollars.

"The Obama administration has refused to disclose how it paid any of the $1.7 billion, despite congressional queries, outside of saying that it wasn't paid in dollars," the newspaper reported.

On Twitter, Republican presidential candidate Donald Trump called the story a "scandal."

Update at 4:15 p.m. ET. The Timing:

It's worth noting that White House Press Secretary Josh Earnest answered some of these questions back in January.

Earnest was asked if the timing of the payment and release of prisoners was a coincidence and it resulted in this exchange:

MR. EARNEST: Jon, I think we've made pretty clear that this is not a coincidence. The fact is, these kinds of diplomatic opportunities --

Q: So it was — because Paul Ryan has suggested this was a ransom payment. You saw his statement.

MR. EARNEST: He's wrong about that.

Q But you're saying that this is connected with the freedom of --

MR. EARNEST: What I'm suggesting is that the successful resolution of our concerns about Iran's nuclear program created a series of diplomatic opportunities for the United States that we've capitalized on. And we used that opening and we used that deeper diplomatic engagement to secure the release of five American citizens who are being unjustly held inside of Iran. And we used that diplomatic opening to resolve a longstanding financial claim that the Iranians had against the United States in a way that ultimately saves U.S. taxpayers billions of dollars, potentially up to $6 billion or $7 billion. So this is exhibit A in the administration pursuing tough, principled diplomacy in a way that actually ends up making the American people safer and advancing the interests of the United States more effectively than military actions.

NPR's Michele Kelemen spoke with Kenneth Katzman, an Iran expert with the Congressional Research Service, who characterized the deal as an attempt to "clear the slate."

But, Michele reports, Iranian authorities have since arrested more Westerners, including three Iranian Americans.

"The challenge always in dealing with the Iranian regime is that they will never articulate up front what they are looking for in exchange. Are they looking for cash? Are they looking for the release of their own prisoners? Are they looking for other things?" Karim Sadjadpour, of the Carnegie Endowment for International Peace, told Michele.

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