National Security

Obama Admin Confirms U.S. Transferred an Additional 1.3 Billion in Cash to Iran

John Kerry, Javad Zarif
John Kerry, Javad Zarif / AP

The Obama administration acknowledged Tuesday night that the United States transferred an additional $1.3 billion in cash to Iran using foreign currency days after paying Tehran an initial $400 million, the Wall Street Journal reported.

The additional 1.3 billion was given to Iran as interest on a settlement of a failed 1979 arms deal between both countries before the Islamic Revolution. The Obama administration airlifted $400 million in pallets of euros and Swiss francs to Iran on Jan. 17 to settle the claim on the same day that Tehran released four American prisoners. The State Department confirmed last month the payment was used as leverage to secure the release of the hostages, leading critics to charge the administration of making a ransom payment.

Administration officials briefed lawmakers on the matter Tuesday, according to the Journal.

The Obama administration briefed lawmakers on Tuesday, telling them that two further portions of the $1.3 billion were transferred though Europe on Jan. 22 and Feb. 5. The payment "flowed in the same manner" as the original $400 million that an Iranian cargo plane picked up in Geneva, Switzerland, according to a congressional aide who took part in the briefing.

The Treasury department confirmed the payment, the Associated Press reported, saying that the total amount of $1.7 billion was all paid in cash.

Treasury Department spokeswoman Dawn Selak said in a statement the cash payments were necessary because of the "effectiveness of U.S. and international sanctions," which isolated Iran from the international finance system.

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The money came from a little-known fund administered by the Treasury Department for settling litigation claims. The so-called Judgment Fund is taxpayer money Congress has permanently approved in the event it's needed, allowing the president to bypass direct congressional approval to make a settlement. The U.S. previously paid out $278 million in Iran-related claims by using the fund in 1991.

Lawmakers have spoken publicly about concerns that the money could end up in the hands of terrorists, "particularly the elite Islamic Revolutionary Guard Corps, [which] would use the cash to finance military allies in the Middle East, including the Assad regime in Syria, Houthi militias in Yemen, and the Lebanese militia, Hezbollah," the Wall Street Journal noted.

Congressional Republicans introduced a bill on Tuesday to block the Treasury Department from making any payments to Iran until it returns the 1.7 billion and pays the American terrorism victims.

Iran currently still detains at least three dual U.S.-Iranian citizens.