Reports: Obama paid $1.7 billion ‘ransom’ to Iran for hostages’ release

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The Obama administration has paid a “ransom” of $1.7 billion in U.S. taxpayers’ funds to Iran for the release of American hostages, critics and Iran officials said.

The administration insists the payment was a decades-old legal settlement with Teheran and was not tied to the recent release of five American hostages, according to a report by the Washington Free Beacon. The payment was made to Iran prior to the hostages being freed.

President Barack Obama speaks about US-Iran relations, including the Iranian-American nationals freed as part of a prisoner swap. Photo: Getty Images
President Barack Obama on Jan. 17 speaks about the U.S. prisoner swap with Iran.  /Getty Images

“Obama officials are the last people on earth who are pretending that the $1.7 billion wasn’t a ransom payment,” a foreign policy consultant who worked with Congress on the nuclear deal told the Free Beacon.

“Everyone else knows what happened, which is that we rewarded Iranian hostage takers. The hostage takers certainly aren’t fooled, which is why they’re already looking for more Americans to kidnap. They need to restock.”

Officials also told the Beacon that the $1.7 billion settlement is separate from the nuclear deal and the $150 billion in unfrozen cash assets the United States is obligated to give Iran under the agreement.

The payment, the Obama administration said, was its effort to “make good” on a deal the U.S. made to provide military equipment to Iran following the 1979 Islamic revolution. Iran gets the $400 million balance to settle the deal, plus $1.3 billion in interest from the Treasury Department’s Judgment Fund, a federal account that the executive branch uses to settle international legal claims, a State Department official said.

A senior Iranian military commander, however, said on Jan. 20 that the payment was made by the U.S. to motivate Iranian authorities to free the American hostages.

“The annulment of sanctions against Iran’s Bank Sepah and reclaiming of $1.7bln of Iran’s frozen assets after 36 years showed that the U.S. doesn’t understand anything but the language of force,” Mohammad Reza Naqdi, the commander of Iran’s volunteer Basij forces, told the country’s state-controlled press.

“This money was returned for the freedom of the U.S. spy and it was not related to the [nuclear] negotiations,” he said.

Obama administration officials explained that the $1.7 billion payment was actually a victory for the United States since Iran sought larger amounts of interest.

With “each passing day we would’ve owed more interest,” Ned Price, spokesman for the White House’s National Security Council,  told the Free Beacon via Twitter. “The sooner we settled, the better.”

Another official said the settlement with Iran remains “in the interests of the United States. In constructive bilateral talks, we were able to reach a fair settlement that is unquestionably in the interests of the United States given our litigation risk for this claim. Settlement discussions will continue on remaining unsettled claims.”

Meanwhile, Secretary of State John Kerry said some of the cash Teheran is getting from sanctions relief might end up going to Iran’s Islamic Revolutionary Guard Corps (IRGC).

“I think that some of [the $55 billion] will end up in the hands of the IRGC or of other entities, some of which are labeled terrorists,” Kerry said.