U.S. Paid Iran $400 Million During Prisoner Release

Iranian Foreign Minister Javad Zarif meets with U.S. Secretary of State John Kerry in May, four months after the $400 million payoff. Source: Wikimedia Commons

The United States Department of State confirmed in August that the US paid $400 million to the Iranian government in exchange for the return of four American prisoners. The payoff, which was made in January, was the first payment of a $1.7 billion settlement negotiated by a joint Iranian-American tribunal to resolve a dispute over a 1979 arms deal.

The United States withheld the payment until immediately after Iran released the American captives. State Department spokesman John Kirby explained that the United States “deliberately leveraged that moment to finalize these outstanding issues nearly simultaneously.” Delivered in an unmarked cargo plane, the cash was denominated in a variety of international currencies.

Iranian leaders are regarding the payment as a ransom. Iranian General Mohammad Reza Naghdi asserted that the money was in fact a ransom for the American prisoners. He claimed, “taking this much money back was in return for the release of the American spies.” The Iranian press touted the payment as another victory against the United States.

The US has maintained a longstanding policy forbidding ransom payments because they can encourage abductors to take more hostages, and the Obama administration does not call the payoff a ransom. Nevertheless, the US may have set a precedent for the remaining payments of the $1.7 billion settlement. Since the payment, Iranian authorities have detained two Iranian-American dual-citizens.

The State Department considers Iran to be the world's most active state sponsor of terrorism, and the payoff has aroused additional suspicions due to Iran’s role as a prolific financier of violence. Iran funds terrorist groups across the Middle East, including Hamas in Palestine, Hezbollah in Lebanon, and multiple paramilitary groups in Iraq and Afghanistan. Iran also funds the regime of Syrian dictator Bashar al-Assad and has aided Assad’s brutal war effort in the Syrian Civil War. Iran’s sponsorship of violence is a part of its larger strategy to use proxies throughout the Middle East in order to achieve geopolitical dominance in the region.

The Obama administration acknowledged that Iran may use the $400 million to continue its strategy of financing violent groups. “We know that Iran supports terrorism, we know that Iran supports Hezbollah and the Assad regime, and it certainly is possible that some of the money that Iran has is being used for those purposes,” White House Press Secretary Josh Earnest admitted.