Obama defends US payment to Iran

"We announced these payments in January, many months ago. It wasn't a secret. This wasn't some nefarious deal," Obama said at a press conference at the Pentagon on Thursday.

"The reason that we had to give cash is precisely because we are so strict in maintaining sanctions and we do not have a banking relationship with Iran," he added, going on to praise the nuclear deal and saying it had worked "exactly as intended."

Obama's remarks came after an earlier statement by US Secretary of State John Kerry, who said the $400-million (360 million euros) cash payment to Iran was not a ransom paid to free US prisoners.

The payout, which also came when a nuclear agreement was finalized, was negotiated separately and was part of an Iranian government claim going back to the 1980s, according to Kerry.

The dispute involved a military deal dating back to the 1970s, before the Islamic Revolution in 1979.

Several Americans, who were in Iranian prisons earlier this year, were nonetheless released at the time of the payout and the conclusion of the nuclear agreement.

"The United States does not pay ransom and does not negotiate ransoms," Kerry told reporters on a trip to Buenos Aires. "It is not our policy. This story is not a new story. This was announced by the president of the United States himself at the same time."

"It would have worked against the interests of our taxpayers," he continued, "and with the nuclear deal done, the prisoners released, the time was right to take advantage of that and resolve the dispute in the way that it was resolved."

Military deal gone bad

The cash, in addition to $1.3 billion interest to be paid later, revolved around a failed military equipment deal at time when the US-backed Shah still ruled Iran.

Kerry said the payment resolved a longstanding Iranian claim at the Iran-US Claims Tribunal in The Hague, and ultimately saved US taxpayers from paying even more interest.

"We believe this agreement ... actually saved the American taxpayers potentially billions of dollars," Kerry said. "There was no benefit to the United States of America to drag this out."

Kerry said he was not aware of any video of the arrival of a bundle of cash, as claimed by Republican presidential candidate Donald Trump on Wednesday.

Trump, who is trying to jumpstart his sputtering campaign, slammed the Obama administration over the deal.

On January 17 the White House announced it was releasing the funds, which had been frozen since 1981, in addition to paying off the interest.

On Wednesday, Republican Representative Jason Chaffetz, chairman of the House of Representatives Committee on Oversight and Government Reform, formally requested Kerry to appear at a future committee hearing to discuss the payment.

The State Department confirmed having received the request and said they would respond "as appropriate."

bik, jbh / cmk (AP, Reuters)