State Department spokesman John Kirby was grilled Wednesday on Fox News over a new report that the Obama administration airlifted $400 million in cash to Iran in January as the Islamic Republic released four Americans it had detained.

The payment, reported by the Wall Street Journal, has drawn accusations that it was a ransom payment for the Americans held hostage by the Iranian government. The Obama administration insists that it is a part of a resolution to a decades-old arms deal made with Tehran before the Islamic Revolution in 1979.

"Well, first of all, it was their money, this was $400 million in a trust fund that had been frozen back in the late ‘70s, early ‘80s," Kirby said. "So, this was a longstanding claim. It was their money, and as the president said at the time, and we spoke to this at the time, that now with the prisoners’ release, now with the Iran [nuclear] deal done, it made no sense for us to continue to drag out this claim and so we settled it."

Fox News’ Bill Hemmer pressed Kirby on how the money transfer was made.

"When you see video, at night of an unmarked jet with pallets of euros and Swiss francs being unloaded as a payment for Iran, it looks bad and it smells," Hemmer said.

Kirby said that he would leave it to Hemmer to characterize the money transfer for himself.

Hemmer also asked Kirby about further payments that Iran is set to receive. The $400 million is part of a $1.7 billion settlement between the Obama administration and the Iranian regime.

"$1.3 billion to go, correct? So, that means what? Is that more pallets of euros headed for Tehran?" Hemmer asked.

Kirby said that he was unaware of the payment schedule and boasted that the $1.3 billion left to be paid is at a fixed interest rate.

Hemmer then turned the discussion to Iran’s sponsorship of terrorism and other nefarious activities around the world.

"But you know what happens when American dollars pay for kidnappings, pay for assassinations, go to bad actors in this world," Hemmer said. "That action leads to more action, and you know how dangerous that can be."

Kirby acknowledged Iran’s destabilizing behavior, and repeated his statement that this was not a ransom payment.