U.S. Withheld $400M Cash Payment to Iran Until American Prisoners Freed

A Boeing 747 of Iran's national airline is seen at Mehrabad International Airport in Tehran / AP
August 18, 2016

The Obama administration withheld its $400 million cash payment to Iran until Tehran released multiple American prisoners in a calculated exchange.

New details from the Wall Street Journal emerged Wednesday night revealing that U.S. officials refused to transfer the money to Iran until three freed Americans aboard a Swiss Air Force plane were en route from Tehran. Only afterward could an Iranian cargo plane depart from a Geneva airport to bring the cash home.

The exchange occurred Jan. 17, one day after the Iranian nuclear deal was formally implemented.

President Obama and administration officials denied the payment was a ransom, maintaining that it was part of a $1.7 billion settlement over a failed arms deal from the late 1970s, before the Iranian Revolution.

U.S. officials have said that the cash transfer and prison release occurred through separate diplomatic channels. The State Department, with assistance from the CIA and FBI, spearheaded the prisoner-swap negotiations, while the cash transfer was led by State Department attorneys.

Senior Justice Department officials opposed the transfer, voicing concerns Iran would view it as a ransom payment despite a longstanding U.S. policy that forbids government payments in exchange for hostages.

Administration officials have refused to comment on the details of the transfer. Executives from Iran Air told the Wall Street Journal that they arranged the flight from Tehran to Geneva to load the cash on the plane. The money was converted into euros and Swiss francs, among other currencies.

"Our top priority was getting the Americans home," one U.S. official said. After the freed Americans were "wheels up" Jan. 17, Iranian officials could take control of the money in Geneva, according to officials.

The State Department’s press office director Elizabeth Trudeau refused last week to comment on the timing of the prisoner release and cash exchange. She said only that there was no connection between the prisoners leaving Iran and the $400 million payment it received.

"Claims that the freed Americans were not allowed to depart until a ‘plane full of cash,’ and I’m doing that in air quotes, are just false," Trudeau told an Associated Press reporter Aug. 8.

Obama said during a press conference earlier this month that the payment had to be in cash because the U.S. does not "have a banking relationship with Iran."

Assistant Secretary of State for Legislative Affairs Julia Frifield confirmed the $400 million payment to Iran in a letter to Congress dated March 17, 2016. She made no mention of the prisoner release.