The Barack Obama administration secretly arranged an airlift of $400m (£300m) to Iran in January, which coincided with the release of four American nationals from a Tehran prison, it has emerged. Officials have denied in the past that any ransom was paid to free them.
The money was arranged from the central banks of the Netherlands and Switzerland and included euros, Swiss francs and other currencies, which were flown into Iran in an unmarked cargo plane, some US and European officials as well as congressional staff, who were briefed on the operation, reportedly said.
US officials claimed that Iranian negotiators involved in the release of the Americans wanted the cash to show to their authorities that they had gained something tangible from the deal. Even the Iranian media had quoted their defence officials as terming the cash payment as ransom, The Wall Street Journal reported.
The four American nationals, including Washington Post journalist Jason Rezaian, had dual US-Iranian citizenship.
One of the US officials briefed on the January cash delivery was quoted as saying: "Sometimes the Iranians want cash because it's so hard for them to access things in the international financial system. They know it can take months just to figure out how to wire money from one place to another."
The airlifted money is believed to have been the first instalment of a $1.7bn settlement reached between the Obama administration and Iran to resolve a decades-old dispute between the two countries over a failed arms deal dating back to the 1970s. Iran was reportedly seeking more than $10bn from the US over the dispute which was being heard at the International Court of Arbitration in The Hague. Some US officials claimed that the US was very likely to lose the case and thus entered into the settlement.
The settlement also coincided with the formal implementation of a long-awaited nuclear deal between Iran and global powers.
State Department spokesman John Kirby clarified that the release of the Americans and the settlement were two separate incidents. "As we've made clear, the negotiations over the settlement of an outstanding claim...were completely separate from the discussions about returning our American citizens home," he said, adding: "Not only were the two negotiations separate, they were conducted by different teams on each side, including, in the case of The Hague claims, by technical experts involved in these negotiations for many years."
The president completely avoided the mention of the $400m cash payment during his address on 17 January in the White House that followed the release of the four Americans. He only said: "With the nuclear deal done, prisoners released, the time was right to resolve this [arms lead] dispute as well."
However, Tom Cotton, a Republican Senator from Arkansas who was against the Iran nuclear deal, accused Obama of paying "a $1.7bn ransom to the ayatollahs for US hostages". He added: "This break with longstanding US policy put a price on the head of Americans, and has led Iran to continue its illegal seizures" of Americans.