published Aug 4th 2016, 4:30 pm, by Justin Sink

(Bloomberg) —
President Barack Obama said Thursday that $400 million in cash airlifted to Iran in January didn’t represent a ransom payment to secure the freedom of four detained Americans released the same day, and wasn’t a secret.

“We were completely open with everybody about it, and it’s interesting to me that this suddenly became a story again,” Obama said during a news conference at the Pentagon after meeting with his national security advisers. “We do not pay ransom for hostages.”

Republicans have seized on a report in the Wall Street Journal that the Obama administration sidestepped restrictions on banking with Iran by delivering the cash in foreign currency aboard an unmarked airplane. Critics of Obama’s nuclear deal with Iran say the payment was ransom, a contention the White House has strongly denied; that it will encourage Iran to take more Americans hostage; and that it’s likely the money will be funneled into terrorist groups.

“If true, this report confirms our longstanding suspicion that the administration paid a ransom in exchange for Americans unjustly detained in Iran,” House Speaker Paul Ryan, a Wisconsin Republican, said in a statement. “It would also mark another chapter in the ongoing saga of misleading the American people to sell this dangerous nuclear deal.”

Obama administration officials have dismissed the controversy as old news, noting that the settlement was fully disclosed by the White House and State Department at the time the Iran nuclear deal was announced.

“The United States of America does not pay ransom and doesn’t negotiate ransoms with any country — we never have and we’re not doing that now,” Secretary of State John Kerry said Thursday in Buenos Aires.

Defies Logic

Obama said that “hundreds” of Americans are held captive around the world, and that he has assigned officials across the government to work with their families to secure their release. It wouldn’t make sense, he said, to pay the Iranians a ransom while telling other families that the U.S. doesn’t pay ransom.

“The notion that we would somehow start now in this high-profile way, and announce it to the world, even as we’re looking in the faces of other families whose loved ones are being held hostage and say to them, ‘we don’t pay ransom,’ defies logic,” Obama said.

The payment is the settlement of a decades-old dispute over returning Iranian funds from a weapons purchase placed by the government of Mohammad Reza Shah Pahlavi before he was ousted. And the delivery of the payment in foreign currency, officials say, was logical because U.S. sanctions prohibit deals with Iran using dollars and the U.S. has no banking relationship with the country.

“The only bit of news that is relevant on this is the fact that we paid cash,” Obama said. Restrictions on U.S. banking relationships with Iran mean “we could not send them a check, and we could not wire them the money.”

Republican presidential nominee Donald Trump used the report to attack Hillary Clinton, the former secretary of State and his Democratic opponent, saying she began negotiations with Iran.

Clinton did initiate early negotiations that led to the Iran nuclear deal, which was announced the day before Iran and the U.S. said they had settled the claim to the $400 million payment. But the disagreement over the money dates back decades, and it appeared likely that a Hague commission that oversees competing claims between the U.S. and Iran would have ordered the return of the money, plus a larger amount of interest, had there been no settlement.

Clinton dismissed concern over the payment as partisan in an interview Thursday with KUSA, a Denver television station, and defended the deal to curtail Iran’s nuclear program.

“They want to continue to criticize the agreement, and I think they are wrong about that,” Clinton said of Republican critics. “I have said the agreement has made the world safer, but it has to be enforced. And I’ve spoken out very strongly about how I will enforce this agreement.”

Obama described the flap over the cash payment as a diversion from the success of the nuclear accord between Iran and world powers. “By all accounts, it has worked exactly the way we said it was going to work,” he said.

–With assistance from Charlie Devereux and Jennifer Epstein. To contact the reporter on this story: Justin Sink in Washington at jsink1@bloomberg.net To contact the editors responsible for this story: Joe Sobczyk at jsobczyk@bloomberg.net Alex Wayne, Larry Liebert

copyright
© 2016 Bloomberg L.P