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The Obama administration secretly arranged a plane delivery of $400 million in cash on the same day Iran released four American prisoners and formally implemented the nuclear deal, US officials confirmed Wednesday. President Barack Obama approved the $400 million transfer, which he had announced in January as part of the Iran nuclear deal. In addition, they said the cash delivery amounted to a ransom payment that violates long-standing US practice not to pay for hostages. Republican presidential nominee Donald Trump jumped on the issue, seeking to change the subject after a punishing week of gaffes and reproaches from members of the GOP. US officials said cash had to be flown in because existing US sanctions ban American dollars from being used in a transaction with Iran and because Iran could not access the global financial system due to international sanctions it was under at the time.
The money was procured from central banks in Switzerland and the Netherlands, official said, and an unmarked cargo plane loaded with Swiss francs, euros and other currencies were flown to Iran.
While the cash transaction took place the same day as the release of Washington Post reporter Jason Rezaian and the other Americans, administration officials insist the payment did not constitute ransom and that there were was no quid pro quo for the payment. In return for the US citizens’ release, the US dropped extradition requests for 14 Iranian citizens and freed seven. The $400 million was Iran’s to start with, placed into a US-based trust fund to support American military equipment purchases in the 1970s. As it was making the January cash delivery, the US also imposed new sanctions on Iran over its ballistic missile testing.
Legal claims are one of the reasons the payment to Iran was controversial when Obama first announced it. These families and individuals had sued the Islamic Republic for damages after the deaths of loved ones or for being the victims themselves of Iran-backed kidnappings or terrorist attacks.
With Obama’s announcement, it became apparent that the payments had come from US taxpayers and not from Iran at all.

Critics on Wednesday were further incensed by Iranian claims that the cash amounted to a ransom payment for the four prisoners. US officials conceded that the Iranian negotiators involved in the prisoner exchange said they wanted the cash to coincide with the release of the Americans to prove a deliverable for the exchange even as they argued against the characterization of it as a ransom payment.
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The money was flown into Iran on wooden pallets stacked with Swiss francs, euros and other currencies as the first installment of a $1.7 billion settlement resolving claims at an international tribunal at The Hague over a failed arms deal under the time of the Shah. They charged that the administration had empowered a major sponsor of terrorism because the nuclear agreement enables Tehran to re-enter the international economy and gives it access long-frozen funds. As such, they argued, it encourages Iran to hold onto its remaining Americans prisoners until they can get more money for them. The details of the how the transaction occurred were first reported by The Wall Street Journal.
They said the agreement on the release of the prisoners dovetailed with the resolution of parallel negotiations over the dispute of the failed arms deal.
When the Shah was ousted by a 1979 popular uprising that led to the creation of the Islamic Republic, the US froze the trust fund. At the same time, the White House unfroze a larger pool of Iranian assets, estimated at $100 to $150 billion, as part of the nuclear deal, though administration officials cautioned that Iran would only pocket about $50 billion after legal claims. The Clinton administration had agreed in 2000 to pay that $400 million to Americans who had won lawsuits against Iran in US courts.

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