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White House denies paying $400 million in ransom to Iran

Click to play video: 'Obama administration under fire over report U.S. paid ransom to Iran to release American prisoners' Obama administration under fire over report U.S. paid ransom to Iran to release American prisoners
WATCH: A new report about the timing and method of a settlement payment the federal government made to Iran is causing some political finger-pointing. Accusations from Republicans that the Obama administration paid a ransom to win the release of American prisoners. Chris Pollone reports – Aug 3, 2016

The White House is denying claims that Barack Obama’s administration paid US $400 million to Iran as a ransom.

The Wall Street Journal reported Tuesday  the U.S. “secretly organized” an airlift of $400 million dollars in Euros, Swiss Francs and other currencies to the Middle Eastern country at the same time five Americans were released.

WATCH: McCain calls U.S. paying Iran ransom ‘most shameful’ action by any administration

Click to play video: 'McCain calls report on US paying Iran ransom ‘most shameful’ action by any administration' McCain calls report on US paying Iran ransom ‘most shameful’ action by any administration
McCain calls report on US paying Iran ransom ‘most shameful’ action by any administration – Aug 4, 2016

But the money wasn’t sent there to release the hostages, including Washington Post reporter Jason Rezaian, White House press secretary Josh Earnest said Wednesday at a press briefing.

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“It is against the policy of the United States to pay ransom for hostages,” Earnest said.

WATCH: American prisoners arrive home from Iran amid new sanctions imposed by U.S.  

Click to play video: 'American prisoners arrive home from Iran amid new sanctions imposed by U.S.' American prisoners arrive home from Iran amid new sanctions imposed by U.S.
American prisoners arrive home from Iran amid new sanctions imposed by U.S – Jan 18, 2016

The sum was instead part of a $1.7 billion settlement to Iran over a dispute that went before an international tribunal in The Hague, Earnest explained.

The dispute was regarding a failed sale of U.S. warplanes to Iran before the 1979 overthrow of Shah Mohamed Reza Pahlavi and the start of the Islamic Revolution.

“This $400 million is actually money that the Iranians had paid into a U.S. account in 1979 as part of a transaction to procure military equipment,” Earnest said. “That military equipment … was not provided to the Iranians in 1979 because the Shah of Iran was overthrown.”

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The settlement also came as the U.S. and other Western countries (including Canada) lifted international sanctions on Iran before imposing nuclear sanctions.

READ MORE: UN agency report shows Iran mostly complying with nuke deal

When asked if it was just a coincidence, Earnest said no.

“This all came to a head at the same time because we were addressing and resolving longstanding concerns with Iranian behaviour,” he told reporters.

WATCH: Former Iran prisoner Amir Hekmati says he’s lucky to be free 

Click to play video: 'Iranian prisoner and former U.S. Marine speaks after release' Iranian prisoner and former U.S. Marine speaks after release
Iranian prisoner and former U.S. Marine speaks after release – Jan 19, 2016

Republicans are seizing the opportunity and using the Wall Street Journal report to further condemn the Democrats and the Obama administration for brokering last year’s historic nuclear deal.

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WATCH: Donald Trump says captured American sailors ‘would’ve had to wait until he became president if U.S. hadn’t paid’

Click to play video: 'Donald Trump says captured American sailors ‘would’ve had to wait until he became president if U.S. hadn’t paid’' Donald Trump says captured American sailors ‘would’ve had to wait until he became president if U.S. hadn’t paid’
Donald Trump says captured American sailors ‘would’ve had to wait until he became president if U.S. hadn’t paid’ – Aug 3, 2016

Republican presidential nominee Donald Trump called out Democratic nominee Hillary Clinton for starting the talks in Iran, though she was no longer serving as secretary of state when the deal was completed.

“Our incompetent Secretary of State, Hillary Clinton, was the one who started talks to give 400 million dollars, in cash, to Iran. Scandal!” Trump tweeted.

“It would also mark another chapter in the ongoing saga of misleading the American people to sell this dangerous nuclear deal,” Paul Ryan wrote in a statement online. “Yet again, the public deserves and explanation of the lengths this administration went to in order to accommodate the world’s leading state sponsor of terrorism.”

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