In August 2016 amid a contentious election cycle, the Obama administration made a payment to Iran of $400 million to resolve a long-outstanding legal claim being pursued through the Iran-United States Claims Tribunal. The payment precipitated a rash of controversy, with supporters of Republican presidential nominee Donald Trump accusing the White House of having paid a ransom for the release of hostages.
The controversy prompted some disreputable web sites to interpret the events as meaning that former secretary of state and current Democratic presidential nominee Hillary Clinton had "accidentally" paid the $400 million to the terrorist group ISIS:
President Obama quickly papered over the fact that he gave Iran $400,000,000 to release hostages, but it appears that now Hillary Clinton may have given ISIS $400,000,000 accidently.
So everyone can agree that the $400 million sent to Iran by President Obama can be viewed as skeptical. Yes we received hostages back, but at the same time Iran got all this money and who knows what they are going to do with it.
The White House tried to frame the money sent as anything but a ransom. They instead claimed it was the “first installment of the $1.7 billion in the United States seized in 1979 after an arms deal with the Shah of Iran was halted following the Islamic revolution.”
But everyone can assume that it was really a ransom. No matter which way you frame it, people are going to suspect it was a ransom payment.
That the money was given to Iran in exchange for the release of four Americans imprisoned in that country is a subjective argument many have made, but as we have previously noted, the White House has maintained it is a false one:
Josh Earnest, the White House press secretary, said the payment to Iran was part of the resolution of a longstanding financial dispute between the two nations, and was delivered in cash on pallets because the two nations do not have a banking relationship.
Mr. Earnest also denounced the assertions from some Republicans that the $400 million in foreign currency delivered to Iran was a ransom for four Americans released at the time. He compared the statements from Republicans to those of conservatives in Iran who oppose the nuclear agreement.
The existence of the payment was disclosed in January, and Mr. Earnest dismissed a Wall Street Journal report on Wednesday about the details of the cash payment as a “six-month-old news story” that is being pushed by opponents of the president’s nuclear deal with Iran.
“It’s an indication of just how badly opponents of the Iran deal are struggling to justify their opposition to a successful deal,” Mr. Earnest said.
We further explained the payment on 18 August 2016:
However, the $400 million dollar transfer was actually an openly announced one, paid in settlement of a nearly 40-year dispute between Iran and the United States — a settlement that likely saved the United States several billion dollars.
Back in late 1979, after Iranian revolutionaries took 52 Americans hostage at the US Embassy in Tehran, the United States severed diplomatic relations with Iran and froze Iranian assets in America. Among those frozen assets was a $400 million delivery of fighter jets from the U.S. that Iran’s previous government had already paid for.
Although the American hostages were finally released a year later, issues such as the frozen Iranian assets (including that $400 million) were not settled at that time. Instead, an international court based in the Hague, the Iran–United States Claims Tribunal was established to deal with such legal claims. The tribunal process dragged on for years and years without a ruling on the $400 million being issued, and finally, when arbitration process was apparently about to wind up (quite possibly not in American's favor), the U.S. agreed to pay Iran back the $400 million principal along with $1.3 billion in interest. If the issue had gone to the tribunal for a decision, as was expected, the U.S. could have been on the hook for the full $10 billion in compensation Iran was seeking.
Although Hillary Clinton may have played some part in the long-running dispute between the U.S. and Iran that was being adjudicated at the Claims Tribunal while she was Secretary of State, she had nothing to do with any payment made to Iran in August 2016, as she had left the State Department well over three years earlier. Hillary Clinton didn't — and had no power to — "give" $400 million to Iran or ISIS, "accidentally" or otherwise.
The notion that the White House "admitted" Clinton accidentally gave ISIS the money seems to come from a statement made by White House Press Secretary Josh Earnest on 3 August 2016 — but Earnest did not actually say anything about ISIS, didn't reference Hillary Clinton, and certainly didn't claim the money was paid "accidentally". Earnest instead maintained the money was used mostly to shore up Iran's economic weaknesses:
The President was quite forward-leaning, in advance of the nuclear deal even being completed, in acknowledging that we know that Iran supports terrorism. We know that Iran supports Hezbollah and the Assad regime. And it certainly is possible that some of the money that Iran has is being used for those purposes too. That's precisely why this administration, on the front end, has been deepening our engagement with our partners in the Middle East to counter those activities; to more effectively interdict illicit materials that could be used to support Iran's ballistic missile program; to more effectively strengthen the defenses of our partners to counter Iran's nefarious activities.
But the bulk of the money we know has been going to shoring up their economic weakness. And that's exactly what we predicted. What has not happened, and where the critics of the deal get it wrong, is Iran has not enjoyed hundreds of billions of dollars in sanctions relief. Iran has not been able to use hundreds of billions of dollars in sanctions relief to support terrorism or to prop up the Assad regime. People who have made that prediction were either badly misinformed or lying to the American public. And I'll leave it to them to explain why their prediction didn’t come true. It does explain, however, why they continue to resurface six-month-old news stories to try to justify their opposition to an agreement that has benefited the American people, both financially and when it comes to our national security.