A Treasury spokeswoman told the Associated Press the cash payments were necessary because of the "effectiveness of U.S. and international sanctions," which isolated Iran from the international finance system. The payments were made in Swiss francs, euros and other currencies.
Officials from the Treasury, Justice and State Departments briefed congressional staffers on the payment details Tuesday at the Capitol.
The $1.7 billion was the settlement of a 37-year-old arbitration claim between the U.S. and Iran. The remaining $1.3 billion represented estimated interest on the Iranian cash the U.S. had held since the 1970s.
White House officials had said that they believed the U.S. would lose the arbitration case over the initial $400 million payment, made by the last Shah of Iran months before the Islamic Revolution. Such a decision would have made them liable for much more money.
The Obama administration had claimed the transfer and the prisoner release were unrelated events, but recently acknowledged the cash was used as leverage until the Americans were allowed to leave Iran. Congressional Republicans have accused the White House of paying ransom to Iran in exchange for the prisoners, a charge Obama has rejected.
On Tuesday, Sen. Marco Rubio, R-Fla., and Rep. Ed Royce, R-Calif., introduced bills that would bar such payments in the future.
"The U.S. government should not be in the business of negotiating with terrorists and paying ransom money in exchange for the release of American hostages," Rubio said in a statement.
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