President Barack Obama's administration paid Iran $1.3 billion in order to settle a decades-old feud about an unfulfilled military sale.
In the 1970s, the Iranian government made a $400 million payment to the U.S. for military equipment, according to The Associated Press. However, the arms were never delivered due to the 1979 Islamic Revolution ,which overthrew the shah and ended ties between the U.S. and Iran.
On Jan. 19, the Obama administration paid the original $400 million back to the Iranian government in pallets of cash, according to the AP. The remaining $1.3 billion represents the interest on the debt that has accumulated over the years.
However, some are criticizing the president, saying that the money was actually a ransom payment for the safe release of three American hostages.
Details of how the $400 million was paid to the government seem to support this theory. The money was paid in cash and transported on an Iranian cargo plane to Geneva. Only after the hostages were released could Iranian officials take the money back to their home state.
The Obama administration denies claims that the payment was a ransom; however, it's unclear, then, why the government paid in cash. Obama claimed on Aug. 4 that it was because the U.S. has no banking relationship with Iran, reports The Wall Street Journal. The AP notes that the U.S. still could have sent money electronically through a third-party bank that has a relationship with both countries.
State Department spokeswoman Elizabeth Trudeau refused to comment on the matter, saying that diplomatic sensitivities prevent her from releasing more information. The AP reports that the $400 million was paid using 13 separate payments of $99,999,999.99 and one payment of around $10 million.
It is unclear how the U.S. paid the additional $1.3 billion in alleged interest. Republican house leaders plan on holding hearings on the cash transfer once Congress resumes session in September.