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State Dept. Admits $400M Paid After Hostages Freed for 'Maximum Leverage'

Secretary of State John Kerry meets with Iranian Foreign Minister Mohammad Javad Zarif at United Nations headquarters Sept. 26, 2015. (AP Photo/Craig Ruttle)

WASHINGTON — The State Department today admitted a Wall Street Journal report that America held onto $400 million cash until five prisoners had been released by Iran first, stressing that the U.S. wanted to keep “maximum leverage” but refusing to call it ransom.

Calling it a “tightly scripted exchange” of cash for hostages, the WSJ said U.S. officials didn’t give the Iranians possession of the money until a Swiss Air Force flight carrying three detainees left Tehran in January.

State Department press secretary John Kirby told reporters that he had seen the article but didn’t want to pick it apart.

“Let me address this whole issue of timing this way. We were able to conclude multiple strands of diplomacy within a 24-hour period. Oh, by the way, you can go back and look at your own work that was done back then, and you will see that we were completely above board about this, even the president himself talked about the timing,” Kirby said.

Back on Jan. 17, a senior administration official told reporters on a background call that the U.S. was “settling a longstanding Iranian government claim against the United States government” regarding a shah-era contract in the Foreign Military Sales program.

The official said a $1.7 billion settlement was for “military sales to Iran that they made payment for, and we didn’t make delivery of the military equipment” as Iran “was seeking billions of dollars on this claim, and these kinds of complex litigation are very unpredictable, and our lawyers assessed that we could have faced a significantly higher judgment.”

The payment coincided with the release of Marine veteran Amir Hekmati, seized in August 2011; Washington Post reporter Jason Rezaian, seized in July 2014; Idaho pastor Saeed Abedini, convicted in January 2013 of establishing house churches; Matthew Trevithick, a U.S. student detained last November; and Nosratollah Khosravi-Roodsari, seized in May 2015 after reportedly claiming that he knew the whereabouts of Bob Levinson, a former FBI agent kidnapped in March 2007.

Levinson was not included in the hostage release. The family has received images of him in captivity, though the Iranian government has maintained they don’t know who is holding him.

Seven Iranians held by the U.S. were released, with the administration insisting it was not a prisoner swap. Fourteen Iranians were also pulled off the Interpol list and the $1.7 billion settlement was announced before the administration signed off on Implementation Day sanctions relief.

“We were able to conclude multiple strands of diplomacy within a 24-hour period, including implementation of the Nuclear Deal, the prisoner talks, and a settlement of an outstanding Hague tribunal claim, which saved American taxpayers potentially billions of dollars. As we said at the time, we deliberately leveraged that moment to finalize these outstanding issues nearly simultaneously,” Kirby continued.

“It’s already publicly known that we returned to Iran its $400 million in that same time period as part of the Hague settlement agreement,” he added. “With concerns that Iran may renege on the prisoner release given unnecessary delays regarding persons in Iran who could not be located, as well as, to be quite honest, mutual mistrust between Iran and the United States, we of course sought to retain maximum leverage until after American citizens were released. That was our top priority.”

Pressed on whether the State Department disputes any part of the WSJ story, Kirby replied, “I think I’ve characterized the central finding of the story, which was that the payment of the $400 million was not done until after the prisoners were released. I’m not disputing that.”

As to why the administration didn’t fess up to the timetable earlier: “We had no intention of getting into a tick-tock for every movement that happened in that 24-hour period.”

Kirby said the negotiations over the hostages and the shah-era settlement “came together near simultaneously.”

“If your top priority is to get your Americans out and you’re already having some issues about locating some of them… you want to make sure that that release gets done before we conclude that transaction,” he said.

“Frankly, I think if we had done it any differently then I think [we] would be having a much different conversation up here, wouldn’t we?”

Kirby said they “felt that it would be imprudent not to consider [the cash] some leverage in trying to make sure that our Americans got out.”

“Obviously when you’re inside that 24-hour period, and you already now have concerns about the end game in terms of getting your Americans out, it would have been foolish, imprudent, irresponsible for us not to try to maintain maximum leverage,” he said. “So if you’re asking me was there a connection in that regard, at the end game, I’m not gonna deny that.”

Asked if the deal went down as it did because “the U.S. knew that the Iranians wanted that money at any cost,” the State Department spokesman responded, “I can’t get inside the Iranian brain here.”

“It was their $400 million that had been awarded to them by the Hague Tribunal,” Kirby stressed of the settlement the administration said it forged to avoid litigation. “…We believed that holding up that delivery was prudent and we have released Americans now I think to — we can’t — we’ll never know for sure, but at least we got those people home and there’s no apologies for that whatsoever.”

“Again, we don’t pay ransom…this wasn’t a case of ransom.”

Kirby added that if the administration hadn’t withheld the cash until the prisoners left Tehran,” and if for some reason the Iranians did play games and we didn’t get the Americans out, and we hadn’t tried to use that leverage, then I can understand the disdain and the criticism there.”

“But this was a sound decision,” he said.

President Obama said at an Aug. 4 press conference at the Pentagon that “the reason that we had to give them cash is precisely because we are so strict in maintaining sanctions, and we do not have a banking relationship with Iran, that we couldn’t send them a check, and we could not wire the money.”

“It is not at all clear to me why it is that cash, as opposed to a check or a wire transfer has made this into a new story,” Obama said. “Maybe because it kind of feels like some kind of spy novel or you know, some you know, crime novel because cash was exchanged.”

Since the nuclear deal went into effect, Iran has seized American Siamak Namaziand his father Baquer Namazi, Canadian Homa Hoodfar, Briton Nazanin Zaghari-Ratcliffe, and Lebanese Nizar Zakka, a permanent U.S. resident who was invited by the regime to a conference on women’s entrepreneurship in September and then arrested. Last month, Iran took another American: Robin Shahini of San Diego, who has a history of criticizing Iran’s human-rights abuses and was visiting family in the country.