DAVID GREENE, HOST:
The Obama administration has acknowledged, grudgingly, that it released a $400 million payment to Iran only after the Iranian government freed several American prisoners. Republicans pounced on this, accusing the administration of paying ransom to Iran, in violation of long-standing U.S. policy. The administration still insists this cash payment was not ransom, though it concedes for the first time it used the money as leverage to guarantee the prisoners' release. And let's sort this out with NPR's Scott Horsley, who's on the line. Good morning, Scott.
SCOTT HORSLEY, BYLINE: Good morning, David.
GREENE: So this goes back to January, right, when there were a number of diplomatic overtures to Iran all happening at the same time. Just take us back there.
HORSLEY: Yeah. It was a busy weekend, David. The Iran nuclear deal was coming into implementation. The United States and Iran agreed to a prisoner swap. And the two countries settled a decades-old financial dispute, which stemmed from some weapons the shah of Iran had paid for but which were never delivered by the U.S. after the Iranian revolution. To settle that dispute, the United States agreed to refund the payment price plus interest, which totals some $1.7 billion.
GREENE: But all of this unrelated, we were told, right?
HORSLEY: That's right. At the time, and pretty much ever since, the White House has said even though these deals came together at the same time, they were negotiated separately and that there was no connection between the payment and the prisoners. Now, that's been called into question over the last couple of weeks, as predominately The Wall Street Journal reported on the very coincidental timing of the exchange.
And yesterday, for the first time, the State Department conceded that the U.S. held on to the $400 million cash payment - that was sort of a down payment on the financial settlement - until the American prisoners were safely out of Tehran. Associated Press reporter Brad Clapper pressed the State Department spokesman, John Kirby, about that, saying it seemed to suggest a closer link between the two than had previously been disclosed.
(SOUNDBITE OF ARCHIVED RECORDING)
BRAD KLAPPER: You said they would not get the money until they were released, quid quo.
JOHN KIRBY: Thank you for the Latin expert (laughter).
HORSLEY: Now, one might say this was really more of a quo pro quid...
HORSLEY: ...Because the prisoners were released first and then the money was handed over. But either way, critics say it looks like a ransom payment.
GREENE: Well, Scott, remind us, if it was a ransom payment, why would that be such a big deal?
HORSLEY: Well, for years, the United States government has adopted a policy of not paying ransom and sometimes at a short-term cost. I mean, remember, we've had American hostages, for example, murdered by ISIS, even as hostages from other countries were freed in exchange for a ransom. Nevertheless, the Obama administration stands by its no-ransom policy. And the president himself said just two weeks ago that the $400 million sent to Iran was not a payment for the prisoners.
(SOUNDBITE OF ARCHIVED RECORDING)
PRESIDENT BARACK OBAMA: We do not pay ransom. We didn't here and we don't - we won't in the future. Precisely because if we did, then we would start encouraging Americans to be targeted, much in the same way that some countries that do pay ransom end up having a lot more of their citizens being taken by various groups.
HORSLEY: The administration insists that it would have sent that $400 million to Iran eventually anyway as part of the larger financial settlement. But Kirby says the U.S. held onto the money temporarily as a source of leverage until those Americans were freed.
GREENE: And I gather the president's skeptics not buying this?
HORSLEY: No. Republicans have been very critical. Nebraska Senator Ben Sasse says if it quacks like a duck, it's a duck. He and other GOP critics say the money was a ransom. There have been calls for congressional hearings. And the criticism is especially strong from those who are opposed to the Iran nuclear deal, which, of course, slowed Iran's ability to develop nuclear weapons in exchange for the relaxing of economic sanctions.
GREENE: OK. NPR's Scott Horsley. Thanks a lot, Scott.
HORSLEY: You bet. Transcript provided by NPR, Copyright NPR.