US payment of $1.7 billion to Iran made entirely in cash




WASHINGTON (AP) — The Obama administration acknowledged late Tuesday that its transfer of $1.7 billion to Iran earlier this year was made entirely in cash, using non-U.S. currency, as Republican critics of the transaction continued to denounce it.

Treasury Department spokeswoman Dawn Selak said in a statement the cash payments were necessary because of the "effectiveness of U.S. and international sanctions," which isolated Iran from the international finance system.

The $1.7 billion was the settlement of a decades-old arbitration claim between the U.S. and Iran. An initial $400 million cash delivery was sent Jan. 17, the same day Tehran agreed to release four American prisoners.

The Obama administration had claimed the events were separate, but recently acknowledged the cash was used as leverage until the Americans were allowed to leave Iran. The remaining $1.3 billion represented estimated interest on the Iranian cash the U.S. had held since the 1970s.

The money came from a little-known fund 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.

Republicans have decried the payments as ransom, a charge the Obama administration has rejected. On Tuesday, a group of Republican senators announced their support for legislation that would bar payments from the Judgment Fund to Iran until Tehran pays the nearly $55.6 billion that U.S. courts have judged that it owes to American victims of Iranian terrorism.

"President Obama's disastrous nuclear deal with Iran was sweetened with an illicit ransom payment and billions of dollars for the world's foremost state sponsor of terrorism," said Sen. Marco Rubio, R-Fla., the bill's primary sponsor.

Both the House and Senate are planning to hold hearings on the payments.
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