An unmarked cargo plane loaded with $400 million in foreign currency was sent to Iran as four Americans detained in Tehran were released but the U.S. denies the delivery was a ransom payment.
Officials told The Wall Street Journal that wooden pallets stacked with euros, Swiss francs and other currencies were secretly flown into Iran on the plane in January, the same day the U.S. exchanged seven Iranians for four American citizens who had been detained.
The Obama administration secretly arranged the Jan. 17 airlift after negotiating a $1.7 billion settlement with Iran relating to the sale of military equipment dating to 1979, according to The Journal.
The clandestine cash transfer was sure to fuel anger over Obama’s willingness to work with the Iranians. Icy diplomatic relations had begun to thaw, with emissaries of both countries working on three fronts.
The settlement was announced one day after the prisoner exchange and days after the U.S. and five other countries reached a landmark nuclear deal with Iranian officials.
Amid all of the wheeling and dealing, Obama failed to mention the $400 million payoff.
“For the United States, this settlement could save us billions of dollars that could have been pursued by Iran,” Obama said in January. “So there was no benefit to the United States in dragging this out.
With the nuclear deal done, prisoners released, the time was right to resolve this dispute as well.”
The President has faced criticism from all sides, though especially from Republicans, over his willingness to work with the Islamic republic.
U.S. authorities insist that the negotiations regarding the prisoner exchanges were completely separate from the nuclear deal and the settlement, but questions remain about the timing of the secret payment.
“As we’ve made clear, the negotiations over the settlement of an outstanding claim at the Hague Tribunal were completely separate from the discussions about returning our American citizens home,” State Department spokesman John Kirby said in a statement Tuesday.
“The funds that were transferred to Iran were related solely to the settlement of a longstanding claim at the U.S.-Iran Claims Tribunal at The Hague.”
But officials told The Wall Street Journal that Iranian negotiators on the prisoner exchange said they wanted the cash as a sign of good faith before the transfer of detainees could take place.
President Obama approved the shipment of the nearly half billion dollars and the State and Treasury departments set about untangling the logistics, the newspaper reported.
The U.S. had to reach out to the Swiss and Dutch governments and transfer the equivalent of $400 million to their central banks. The money was then converted into other currencies, loaded onto a nondescript plane and sent to Iran, the Journal reported.
“Sometimes the Iranians want cash because it’s so hard for them to access things in the international financial system,” a senior U.S. official briefed on the January cash delivery told the Journal. “They know it can take months just to figure out how to wire money from one place to another.”
The $400 million figure represents the amount Iran had used to purchase military equipment from the U.S. before diplomatic ties were severed following the Iranian revolution in 1979. The sale was never completed.
Since the prisoner exchange, at least two more Americans have been detained in Iran.
News of the cloak-and-dagger cash payment came hours after Iranian President Hassan Rouhani complained Tuesday that world powers have been hampering the nation’s economic growth.
Rouhani said Iran still cannot access foreign assets though, he said, it has complied with the controversial deal limiting the country’s nuclear program in return for the lifting of some sanctions.
The Iranian president said the U.S. Congress, Israel and other regional countries are thwarting the implementation of the deal.
Iranian officials have demanded in recent weeks the U.S. return $2 billion in Iranian funds that were frozen in New York in 2009.
The Supreme Court recently ruled that the money should be given to victims of Iranian-sponsored terror attacks.
Rouhani said that “if the other party had acted properly, we would be in a better situation today.”
Iran has repeatedly complained that it has fulfilled its end of the deal while all the agreed-upon sanctions have not yet been lifted. The nuclear deal has been criticized as unenforceable by critics, including Republican presidential nominee Donald Trump, who has repeatedly skewered Obama over the deal.
Obama has also faced criticism over a 2014 deal involving the trade of five Taliban prisoners for Army Sgt. Bowe Bergdahl, who was being held in Afghanistan.
According to briefings of US and European officials, the Obama administrations secretly funneled 400 million dollars in cash to the Iranians back in January, as reported by The Wall Street Journal.
The revelation was particularly notable in that it coincided with the release of four American prisoners being held by the Iranians, leading to speculation that the payment was, indeed, a ransom payment.
In turn, if this is true, the entire foundation of the Iran Nuclear Deal, which presumes an already friendlier relationship with Iran, is thrown into question.
Obama dismissed the claims of a ransom payment, claiming it was simply the right time to pay off an old debt from a decades-old failed arms deal: “with the nuclear deal done, and prisoners released, the time was right to resolve this dispute as well,” he said.
State Department spokesman John Kirby also dismissed claims of a connection between the release of the prisoners and the payment: “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. “Not only were the two negotiations separate, they were conducted by different teams on each side.”
Nevertheless, US officials have acknowledged that the Iranian negotiators had said that they wanted something tangible to show for the prisoner release. Further, according to Iranian press reports, Iranian defense officials have portrayed the cash shipment as a ransom payment, as reported by WSJ.