State Department: $400 million cash payment to Iran was contingent on US prisoner release

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Report: Iran Cash Payment Hinged on US Prisoner Release

The State Department says that a $400 million cash payment to Iran was contingent on the release of American prisoners.

Spokesman John Kirby says that negotiations over the US's returning Iranian money from a decades-old account was conducted separately from a prisoner swap in January, in which seven Iranians detained in the US were exchanged for Washington Post reporter Jason Rezaian and three other Iranian-American prisoners.

But Kirby acknowledged for the first time that the US withheld delivery of the cash as leverage until the US citizens had left Iran.

According to The Wall Street Journal, the US refused to hand over the $400 million cash payment that was being held at Geneva Airport "until a Swiss Air Force plane carrying three freed Americans departed from Tehran."

The release of the prisoners and of the $400 million to Iranian control occurred January 17.

Kirby spoke after The Wall Street Journal reported that the departures of the crisscrossing planes were linked.

Administration officials initially denied that the $400 million cash transfer was tantamount to critics' assertion of a ransom payment, insisting that the funds were part of a $1.7 billion financial settlement that the US had reached with Iran as part of the nuclear deal.

"As we've made clear, the negotiations over the settlement of an outstanding claim ... were completely separate from the discussions about returning our American citizens home," Kirby told The Journal, which first reported the $400 million cash payment, earlier this month.

"Not only were the two negotiations separate — they were conducted by different teams on each side, including, in the case of The Hague claims, by technical experts involved in these negotiations for many years," he added.

Iran's President Hassan Rouhani speaks during a news conference in Islamabad, Pakistan, March 26, 2016. REUTERS/Faisal Mahmood/File PhotoAP

That President Barack Obama failed to disclose the transfer of foreign hard currency to Iran by an unmarked cargo plane raised initial questions about the administration's transparency in its dealings with Iran, however.

That scrutiny is bound to intensify now that the State Department has admitted to withholding the funds until the prisoners were released from Iranian custody — a move that some might perceive as the US effectively allowing Iran to use American detainees as bargaining chips.

"There are arguments by some analysts that downplay the transfer as a ransom payment because this was money owed to Iran in principle and interest," Amir Toumaj, an Iran expert at the Washington, DC-based think tank Foundation for Defense of Democracies, told Business Insider earlier this month.

"But we wouldn't be having this discussion if the Islamic Republic were a government that abided by international norms and did not arbitrarily hold hostages as bargaining chips," he said.

The prisoner swap fueled skepticism about the extent to which the US may have appeased Iran in the name of finalizing the landmark nuclear deal. The exchange was later revealed to have been a year in the making, despite claims by administration officials that the subject of a prisoner release was never broached during nuclear-related negotiations.

The swap was also finalized on the same day that the nuclear deal was implemented and the nuclear-related sanctions on Iran were lifted — a "coincidence," as officials characterized it, that left some experts wondering whether the exchange was aimed at bolstering overall support for the deal inside Iran.

"The administration announced the transfer of the $1.7 billion, of which the $400 million is the first installment, in January," Toumaj said.

"Still, the timing of this first installment is suspicious," he added. "And it's difficult to imagine that the prisoner swap and money transfer were not part of a quid pro quo arrangement."

RELATED: See images from the prisoner release

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Amir Hekmati waves after arriving on a private flight at Bishop International Airport, Thursday, Jan. 21, 2016, in Flint, Mich. The 32-year-old Hekmati, a former U.S. Marine who was released from an Iranian prison as part of a deal with Iran is returning to home to Michigan. (AP Photo/Paul Sancya)
Amir Hekmati speaks to the media after arriving on a flight at Bishop International Airport, Thursday, Jan. 21, 2016 in Flint, Mich. Hekmati, a former U.S. Marine who was released from an Iranian prison as part of a deal with Iran, landed in his home state of Michigan on Thursday. (AP Photo/Paul Sancya)
U.S. journalist Jason Rezaian waves as he poses for media people in front of Landstuhl Regional Medical Center in Landstuhl, Germany, Wednesday, Jan. 20, 2016. Rezaian was released from an Irani prison last Saturday. (AP Photo/Michael Probst)
U.S. journalist Jason Rezaian and his wife Yeganeh Salehi hold hands as they pose for media people in front of Landstuhl Regional Medical Center in Landstuhl, Germany, Wednesday, Jan. 20, 2016. Rezaian was released from an Irani prison last Saturday. (AP Photo/Michael Probst)
In this image made from video, former U.S Marine Amir Hekmati, center, is flanked by Michigan congressman Dan Kildee, left, and Hekmati's brother-in-law Ramy Kurdi as he speaks to the media in Landstuhl, Germany, Tuesday, Jan. 19, 2016. Former U.S. Marine Amir Hekmati, who was one of four Americans released by Iran as part of a prisoner swap, is in good health and looking forward to getting home soon, a congressman said Tuesday. U.S. Rep. Dan Kildee, a Democrat from Hekmati's home state of Michigan, said he spent several hours with the 32-year-old, who spent 4 ½ years imprisoned in Iran before his release over the weekend. (APTN via AP)
Dan Levinson, son of Robert Levinson, talks to reporters in New York, Monday, Jan. 18, 2016. The relatives of Robert Levinson, a former FBI agent who disappeared in Iran almost nine years ago, said Monday they're happy for the families of prisoners released from Iranian custody over the weekend but wished government officials had warned them he would not be among them. (AP Photo/Seth Wenig)
Christine Levinson, center, wife of Robert Levinson, and her children, Dan and Samantha Levinson, talk to reporters in New York, Monday, Jan. 18, 2016. The relatives of Robert Levinson, a former FBI agent who disappeared in Iran almost nine years ago, said Monday they're happy for the families of prisoners released from Iranian custody over the weekend but wished government officials had warned them he would not be among them. (AP Photo/Seth Wenig)
U.S. Representatives Dan Kildee, right, and Jared Huffman talk to media people at the Landstuhl Regional Medical Center in Landstuhl, Germany, Monday, Jan. 18, 2016. Four U.S. citizens who were released from an Iranian prison where transferred to Landstuhl for medical treatment. (AP Photo/Michael Probst)
U.S. Representatives Robert Pittenger, center, Dan Kildee, right, and Jared Huffman, left, talk to media people at the Landstuhl Regional Medical Center in Landstuhl, Germany, Monday, Jan. 18, 2016. Four U.S. citizens who were released from an Irani prison where transferred to Landstuhl for medical treatment. (AP Photo/Michael Probst)
President Barack Obama makes a statement on the release of Americans by Iran, Sunday, Jan. 17, 2016, in the Cabinet Room of the White House in Washington. (AP Photo/Jacquelyn Martin)
President Barack Obama makes a statement on the release of Americans by Iran, Sunday, Jan. 17, 2016, in the Cabinet Room of the White House in Washington. (AP Photo/Manuel Balce Ceneta)
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The Associated Press contributed to this report.

NOW WATCH: Obama said the White House previously announced the $400 million payment to Iran — here's the footage

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