Obama says $400 million cash payment to Iran 'wasn't a secret'

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WASHINGTON -- U.S. President Barack Obama expressed surprise Thursday at criticism of his administration's $400 million cash payment to Iran to settle a longstanding legal claim, adamantly rejecting claims that it was a ransom paid for the release of four Americans held in Iran.

"This wasn't some nefarious deal," Obama told reporters at the Pentagon. He pointed out that the payment, along with an additional $1.3 billion in interest to be paid later, was announced by the administration publicly when it was concluded in January, a day after the implementation of a landmark nuclear agreement with Iran. "It wasn't a secret. We were completely open about it."

Obama allowed that the one piece of new information, first reported this week by The Wall Street Journal, was that the $400 million was paid in cash. It was delivered to Iran on palettes aboard an unmarked plane.

"The only bit of news is that we paid cash," he said. "The reason is because we couldn't send them a check and we couldn't wire the money. We don't have a banking relationship with Iran which is part of the pressure we applied on them."

The payment has revived allegations from critics of the Iran nuclear deal. The timing of the arrival of the cash coincided with the release of the four detained Americans as well as implementation of the nuclear deal, leading to charges that the settlement of the 35-year-old claim was a "ransom" payment.

Obama echoed denials of a ransom that have been repeatedly been offered by other administration officials including Secretary of State John Kerry.

"We do not pay ransom for hostages," Obama said, citing longstanding U.S. policy not to pay them for fear of encouraging abductions. "We didn't here and we won't in the future."

Earlier in Buenos Aires, Argentina, Kerry told reporters that the "story is not a new story" and "was announced by the president of the United States himself at the same time."

The settlement stemmed from a claim filed by Iran with an international tribunal in 1981 that related to a $400 million payment made by the government of the U.S.-backed Shah of Iran to purchase military equipment in 1970s. The equipment was never delivered because, in 1979, his government was overthrown and revolutionaries took American hostages at the U.S. Embassy in Tehran. Diplomatic relations were subsequently severed although the two countries did agree to set up the tribunal to rule on claims from both nations.

U.S. officials have said they were concerned that the tribunal might order the U.S. to pay billions more in interest as part of an enforced judgment and that settling the claim in January made good sense.

"It was the assessment of our lawyers that there was significant litigation risk and we could end up costing ourselves billions," Obama said. "Their advice was that we settle."

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Caldwell reported from Buenos Aires, Argentina.