The State Department is staying silent after Iranian officials disclosed that the Islamic Republic spent a recent payment by the United States of $1.7 billion in taxpayer funds to expand and build-up its military, according to comments provided to the Washington Free Beacon.

The Obama administration earlier this year paid Iran $1.7 billion from a U.S. taxpayer-funded account in order to settle decades-old legal disputes with the Islamic Republic.

The payment has been caught up in controversy following claims by Iranian officials and some in the U.S. Congress it was part of a "ransom payment" to secure the release of American hostages and 10 U.S. sailors who were abducted at gunpoint by the Iranian military.

Lawmakers recently launched an investigation to determine if the payment was in fact part of a secret ransom deal with Iran, the Free Beacon recently disclosed.

Iranian officials have now disclosed that officials have ordered that this $1.7 billion be allocated to the Islamic Republic’s military forces.

Iran’s military investment comes as it seeks to boost its forces stationed in the Persian Gulf region. Iran also is engaged in several controversial arms deals with the Russians, including the purchase of several warplanes and an advanced missile system.

When asked by the Free Beacon on Thursday if it could comment on Iran’s use of these U.S. funds, the State Department declined to take a stance.

"We would refer you to the Iranian government to address questions about its budget," a State Department official told the Free Beacon.