WASHINGTON (AP) — The Obama administration's $1.7 billion payment to Iran to settle an arcane, decades-old financial dispute is prompting questions among Republican lawmakers trying to piece together the full scope of last weekend's dramatic U.S.-Iranian prisoner swap and the lifting of many American sanctions on Tehran.
The announcement's timing, just after confirmation that three Americans left Iranian airspace, is leading to calls for investigations and shedding light on a little-known fund that the president can dip into when he wants to resolve international financial disputes. Legislative efforts are already afoot to curtail that ability.
U.S. officials deny claims that the payment was a bribe to ensure the release of a total of five Americans traded for the freedom of seven people in legal trouble in the U.S. over business deals with Iran.
Sunday's financial settlement between Washington and Tehran was largely lost amid U.S. elation over the release of the Americans and global interest in the latest benchmark in Iran's nuclear transformation. With the United Nations' confirmation that Iran satisfied the terms of last summer's nuclear agreement, it immediately recouped tens of billions in frozen assets and earned the chance to gain significantly more from suspended oil, trade and financial sanctions.
Learn more about the relationship between the US and Iran through the years:
United States and Iran Relations throughout time
GOP lawmakers question $1.7 billion payment US made to Iran
Return of the hostages from Iran as they step off the plane in Germany. Barry Rosen is second from the bottom waving with no glasses and a beard. He has just announced that he will be going back to Iran to meet with his captors. The hostages were kept over a year in captivity after the US Embassy was stormed during the Iranian Revolution. Relations with Iran and the US have been improving lately. (photo by Tim Chapman)
A Kurdish family having fled northern Iraq, carry all their worldly possessions, reach the border town of Nossod, Iran. Saddam Hussein crushed the Kurdish uprising in northern Iraq in the aftermath of 1991 Gulf War led by the US and allied forces. (Photo by Kaveh Kazemi/Getty Images)
An Iranian woman pets a dove caged in the belly of a replica of the Statue of Liberty at the former US embassy compound November 3, 2001 in Tehran, Iran. Iranian authorities opened the former embassy to the public for the first time since the 1979 Islamic revolution toppled the US-backed Shah which ultimately led to the breaking of relations between Washington and Tehran. (Photo by Keivan/Getty Images)
Reza Pahlavi, son of the late Shah of Iran Mohammad Reza Shah Pahlavi, speaks to New York University students December 4, 2001 in New York City. Pahlavi spoke of the need to root out terrorism and the need for democracy in Iran. (Photo by Mario Tama/Getty Images)
An Iranian man teaches his son the 'death to America' chant during a demonstration after Friday prayers April 5, 2002 in Tehran. The protesters opposed the Israeli incursion into Palestinian-controlled territories. (Photo by Keivan/Getty Images)
Deputy Secretary of State Richard Armitage greets people before giving testimony before the U.S. Senate Foreign Relations Committee on Capitol Hill October 28, 2003 in Washington DC. The Committee is hearing testimony on security threats and the U.S. policy toward Iran. (Photo by Mark Wilson/Getty Images)
An Iranian girl rests during a meeting of the conservative group, the Coalition of Builders of Islamic Iran, in Tehran February 16, 2004. The group has taken a tough stance on the country's nuclear prerogatives and a moderate line on US-Iranian relations and the imposition of Islamic social regulations. The main reformist parties are staying away after a conservative-run political vetting body, the Guardians Council, barred some 2,300 people -- most of them reformists -- from even standing in the February 20 polls. (Photo credit: BEHROUZ MEHRI/AFP/Getty Images)
A man holds an effigy of U.S. President George W. Bush during a protest against the U.S.-led occupation of Iraq in Enqelab Square May 19, 2004 in Tehran, Iran. Demonstrators reportedly hurled petrol bombs, firecrackers and stones at the British embassy. (Photo by Majid/Getty Images)
This 18 January file photo shows Secretary of State-designate Condoleezza Rice testifying before the Senate Foreign Relations Committee during her confirmation hearing on Capitol Hill in Washington, DC. US Secretary of State Condoleezza Rice will discuss the war in Iraq and tensions with Iran when she meets Chancellor Gerhard Schroeder on 04 February 2005.(Photo credit: TIM SLOAN/AFP/Getty Images)
U.S. Senator Dick Lugar (R-IN) (C) speaks to the media after addressing the U.N. Security Council at the United Nations February 6, 2006 in New York City. Lugar, along with other Senate Foreign Relations Committee members George Voinovich (R-OH) (R) and Norm Coleman (R-MN), spoke on reform at the U.N., Iran and energy conservation. (Photo by Spencer Platt/Getty Images)
Iranian Foreign Minister Manouchehr Mottaki speaks during a meeting with relatives of the seven Iranian detainees arrested in Iraq by US forces, in Tehran, 18 May 2007. US troops seized seven Iranians in the northern Iraqi city of Arbil on 11 January from what Iran claims was an official consular building. Mottaki said after meeting the families of the detainees that Iran maintains that they were diplomats working for a 'consulate'. (Photo credit: ATTA KENARE/AFP/Getty Images)
Iranian students walk past an anti-US mural on the wall of the former US embassy in Tehran 24 October 2007. Twenty-eight years ago, 19-year-old Iranian chemistry student Massoumeh Ebtekar agreed to join other students in holding more than 60 Americans captive at their embassy in Tehran, an event that was to last 444 days and leave a rupture in US-Iranian relations that has yet to be healed. For Ebtekar, who was elected last year as a member of Tehran city council, there is no contradiction between her prominent role in the embassy siege and her efforts today for greater moderation in the Islamic republic. (Photo credit: ATTA KENARE/AFP/Getty Images)
A US soldier carries on March 1, 2008 a platter of mutton and rice offered to the troops by the mayor of the village of Nafet Khana on the Iraq-Iran border, which was destroyed during the 1980-88 Iraq-Iran war. An Iranian delegation left Baghdad for home today without holding talks with officials from archfoe the United States on the security situation in Iraq, an Iranian official said. Iran and the United States, which have had no diplomatic relations since 1980, held three rounds of talks about Iraq last year, but a fourth round scheduled for last month was postponed. AFP PHOTO/PATRICK BAZ (Photo credit should read PATRICK BAZ/AFP/Getty Images)
WASHINGTON, DC - July 09: Undersecretary of State William Burns testifies during the Senate Foreign Relations hearing on Iran. On the same day Iran test-fired missiles in a show of force in the Persian Gulf, the Bush administration Wednesday sought to downplay the country???s power and influence. ???For its part, Tehran seems to relish heightening concerns by promoting the illusion that Iran is on the ascendance,??? Undersecretary of State William Burns said in prepared testimony. ???However, Iran is not 10 feet tall, nor is it even the dominant regional actor.' (Photo by Scott J. Ferrell/Congressional Quarterly/Getty Images)
Japanese Akiko Saberi, mother of US-Iranian journalist Roxana Saberi, holds press cards and ID's for her jailed daughter at the family's house in Tehran on April 18, 2009. An Iranian revolutionary court has sentenced Roxana Saberi, 31, to eight years in jail on charges of spying for the United States, her lawyer said. AFP PHOTO/ATTA KENARE (Photo credit should read ATTA KENARE/AFP/Getty Images)
Iranian nuclear scientist Shahram Amiri stands with his father upon arrival at Imam Khomeini Airport in Tehran on July 15, 2010. Amiri, who claimed he was 'abducted' by US spies last year, denied that he was a nuclear scientist, but said he was questioned by Israelis during his 'harsh' captivity. Amiri had gone missing from Saudi Arabia in June 2009 while on a pilgrimage and surfaced in Iran's Interests Section in Washington on July 13, 2010. Upon his arrival in Tehran he immediately told reporters that he was just a 'simple researcher'. Iranian officials claim he was kidnapped by the Central Intelligence Agency of the United States. US officials have denied these accusations. AFP PHOTO / ATTA KENARE (Photo credit should read ATTA KENARE/AFP/Getty Images)
NEW YORK - JULY 30: (L to R) Laura Fattal, Cindy Hickey and Nora Shourd, mothers of three U.S. Citizens being detained in Iran, hold photos during a protest outside the Iranian mission to the United Nations on July, 30, 2010 in New York City. Josh Fattal, Shane Bauer, and Sarah Shourd, have been held by Irainian authorities since July 31, 2009 after they were detained along the Iraq and Iran border and accused of spying. (Photo by David Goldman/Getty Images)
NEW YORK, NY - SEPTEMBER 25: Josh Fattal (C) and Shane Bauer (R), two American hikers released after spending more than two years imprisoned in Iran, were joined by Sarah Shourd (L) and family members in front of a press-filled conference room at the Parker Meridien New York on September 25, 2011 in New York City. Fattal, Bauer, and Shourd were charged with trespassing and espionage, after allegedly crossing the border between Iraq and Iran on a hiking trip. (Photo by Michael Nagle/Getty Images)
Senator John McCain, a Republican from Arizona, right, and U.S. Secretary of State Hillary Clinton talk during a Senate Foreign Relations Committee nomination hearing in Washington, D.C., U.S., on Thursday, Jan. 24, 2013. Senator John Kerry stressed the need to prevent Iran from acquiring nuclear weapons. He described the 'immediate, dangerous challenges' facing the nation as he seeks confirmation to become secretary of state. Photographer: Andrew Harrer/Bloomberg via Getty Images
WASHINGTON, DC - JULY 22: Ali Rezaian looks at a picture of his brother, Washington Post Tehran bureau chief Jason Rezaian, after a news conference at the National Press Club July 22, 2015 in Washington, DC. The news conference was to give an update on the case of Jason Rezaian, who is being held in Evin Prison in Iran since July 22, 2014. (Photo by Alex Wong/Getty Images)
Sarah Hekmati(R), sister of US Marine Corps veteran Amir Hekmati, speaks about her brother May 19, 2014 during a vigil held for him in Lafayette Park across from the White House in Washington, DC. The vigil was held on the 1,000th day of Amir's imprisonment in Iran. Amir is an Iranian-American detained in Iran while visiting his grandmother. Falsely accused of being a spy, he was detained in August of 2011, held in solitary confinement for months and hidden by the walls of Irans Evin prison. He was sentenced to death in January of 2012, the first American to receive the death penalty in Iran in over 33 years. AFP PHOTO / Karen BLEIER (Photo credit should read KAREN BLEIER/AFP/Getty Images)
Committee chairman Senator Bob Corker(L) , R-TN, and ranking member Senator Benjamin L. Cardin , D-MD, shake hands before a meeting of the Senate Foreign Relations Committee on Capitol Hill April 14, 2015 in Washington, DC. The committee met to debate and vote on S.615, the Iran Nuclear Agreement Review Act of 2015. AFP PHOTO/BRENDAN SMIALOWSKI (Photo credit should read BRENDAN SMIALOWSKI/AFP/Getty Images)
UNITED STATES - JULY 23: Sen. Marco Rubio, R-Fla., takes his seat for the Senate Foreign Relations Committee hearing on the Iran Nuclear Agreement on Thursday, July 23, 2015. Secretary of State John Kerry, Energy Secretary Ernest Moniz, and Treasury Secretary Jack Lew testified. (Photo By Bill Clark/CQ Roll Call)
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The much smaller U.S.-Iranian agreement concerned more than $400 million in Iranian money, dating back to before the 1979 Islamic Revolution and the end of diplomatic ties, which the U.S.-backed shah's government used to buy American military equipment. The Iranians got that money back last weekend and some $1.3 billion in interest.
The administration said the settlement was decided on its merits, with officials arguing that Iran demanded more than $3 billion and, at some points during the talks, much more for an agreement.
Earlier this week, however, one Iranian military commander painted the payment in a different light. Mohammad Reza Naghdi, head of the Basij paramilitary wing of the powerful Revolutionary Guards, said the wiring of the funds was a payoff for letting the Americans go.
U.S. officials insist that's not true.
"There was no bribe, there was no ransom, there was nothing paid to secure the return of these Americans who were, by the way, not spies," State Department spokesman Mark Toner responded, referring to the charges that held each of the Americans in Iranian prison for years.
In addition to those who left Sunday on a charter plane for Switzerland — Washington Post reporter Jason Rezaian, former Marine Amir Hekmati and pastor Saeed Abedini — one American was permitted to leave a day earlier while another who was freed from prison opted to stay in Iran. Rezaian returned to the U.S. on the private jet of Post owner Jeff Bezos, the founder of online giant Amazon, the Post reported Friday night.
See Jason Rezaian since his dramatic release:
Jason Rezaian since his release from Iran prison
GOP lawmakers question $1.7 billion payment US made to Iran
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In exchange for the Americans, the U.S. pardoned or dropped charges against seven Iranian citizens accused of sanctions violations, and gave up on extradition requests for 14 additional people.
In explaining his rationale last weekend, President Barack Obama said the settlement "could save us billions of dollars that could have been pursued by Iran. So there was no benefit to the United States in dragging this out. With the nuclear deal done, prisoners released, the time was right to resolve this dispute as well."
Obama's aides have insisted the deal was entirely separate, but U.S. officials acknowledge the claims and prisoner negotiations crossed over at times.
Although the matter surfaced in a number of exchanges over the years, talks on the money only gained speed during the last year or so of contacts between the Americans and Iranians focused on the prisoner swap, officials familiar with the process said. They weren't authorized to speak publicly on the matter and demanded anonymity.
Lawmakers want more information.
Rep. Mike Pompeo, R-Kan., is seeking an investigation. The GOP-led House Foreign Affairs Committee has asked congressional researchers to look into the matter. And Sen. Jerry Moran, R-Kan., has introduced legislation in the Senate that would limit Obama's ability to transfer funds to Iran, which could affect other, lingering financial disagreements between the two countries.
"The United States should not be funding governments that openly violate human rights, proudly disregard U.N. Security Council resolutions and call for the destruction of America and its allies," Moran said in a statement.
"Rather than incentivize state-sponsored kidnapping," he said, "the administration should remind the government of Iran that terror and hostage taking are not for-profit enterprises."
Rep. Ed Royce, R-Calif., the House Foreign Affairs Committee chairman, told The Associated Press, "This concession was never raised by the State Department as on the table, which the administration must answer for."
To make the payment, the administration returned the $400 million balance from the Iranian account once used for military purchases.
The rest of the money came from an account 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.