Iran Will Have Full Use of Hostage Funds, Tehran Says, Contradicting State Department

by Susan Katz Keating

Tehran will have unrestricted control of assets that are being unfrozen as part of a deal to release five American citizens who will remain captive until all assets are released, according to the Foreign Ministry of Iran.

“Iran will determine how to use these assets, and they will be consumed to meet different needs of the country as determined by the related authorities,” the ministry said in a Friday statement.

Additionally, the American prisoners will remain in Iran until the assets are turned over, the regime said.

“The U.S. prisoners will remain in Iran until the full transfer of Iranian assets in South Korea,” according to Mohammad Jamshidi, the Iranian president’s deputy chief of staff for political affairs. Jamshidi was quoted in a Friday statement by the Foreign Ministry.

The comments about the assets directly contradict assurances from the U.S. State Department that the prisoner swap would place tight restrictions on swapping the prisoners in exchange for $6 billion impounded by South Korea.

“Iran will not be receiving any sanctions relief,” Secretary of State Antony Blinken told reporters on Thursday. “Iran’s own funds would be used and transferred to restricted accounts such that the monies can only be used for humanitarian purposes, which, as you know, is permitted under our sanctions.”

READ MORE about the deal to release American prisoners held captive in Iran

Observers inside the U.S. critiqued the swap, charging that Washington agreed to pay Tehran a huge ransom. 

Former Secretary of State Mike Pompeo wrote on the social media platform X that the deal allows Tehran to make money off of holding American prisoners.

“Releasing $6 billion to the butchers in Tehran just so American hostages can go to a different type of prison is a terrible deal. Iran shouldn’t profit from holding Americans hostage,” Pompeo wrote.

Former Vice President and current presidential candidate Mike Pence also weighed in via X.

“While I welcome the release of American hostages, the American people should know that @POTUS Biden has authorized the largest ransom payment in American history to the Mullahs in Tehran,” Pence wrote.

The U.S. National Security Council held firm.

“This is not a ransom,” NSC spokesman John Kirby countered on CNN. “The account from which money could be accessed by the Iranians is an account set up in the previous administration that allowed other countries to import non-sanctionable goods.”

Kirby echoed Blinken’s stance the money is being released for humanitarian use.

“What we’re talking about is the possibility of making that one account that has been in existence for several years more accessible to the Iranians,” Kirby said. “But they can only pull from that account for humanitarian purposes, and there is an oversight mechanism that’s already built into that process, so it’s not ransom.”

The process of releasing the funds already has begun, according to Tehran’s Foreign Ministry. 

“Iran has received the necessary guarantees for the US commitment to its undertakings in this regard,” the ministry said.

The five American captives have been transferred from Evin prison in Tehran to an unspecified hotel while the deal is in progress, U.S. officials confirmed.