A non-profit oversight group has called on the Department of the Treasury to explain why it sent what is being referred to as a $1.7 billion ransom to Iran in untraceable cash earlier this year.

The Washington-based Cause of Action Institute (CoA) filed a Freedom of Information Act (FOIA) request Wednesday with the Treasury Department demanding the release of documents that will help demystify the covert nature of the so-called ransom. Specifically, the CoA hopes to discover why the Obama administration chose to send untraceable cash to the world’s premier state sponsor of terrorism when alternative means were available.

“This discrepancy raises questions about the nature of the payments and why — if they were made pursuant to a settlement agreement and therefore could have been wired — the Obama Administration agreed to pay the Iranians in untraceable cash,” wrote CoA counsel Jessica Conrad in a letter included with the FOIA request which was provided to the Daily Caller News Foundation.

Despite the administration’s acknowledgement that the payment was used as “leverage” to free American hostages held by Iran, the White House has insisted the payment was not a ransom. Instead, the administration said the money was sent to Iran as part of a settlement regarding money paid into a U.S. defense procurement trust fund prior to the overthrow of Iran’s Shah in 1979.

President Barack Obama claimed in September that the payment had to be made in cash because “we’re so strict in maintaining sanctions,” which would ostensibly prevent a more traceable payment. Conrad countered that point, citing Treasury Department congressional testimony which noted that the U.S. has “broad leeway to engage in transactions necessary to settle claims before the Iran-U.S. Claims Tribunal” — directly contradicting Obama’s claim.

While the Obama administration and its Democratic allies may not consider the payment a ransom, Iran certainly does.

“This money was returned for the freedom of the U.S. spy and it was not related to the [nuclear] sanctions,” Iranian Brig. Gen. Reza Naqdi told Iran’s Fars News in January. The “spy” Naqdi was referring to was Jason Rezaian, a Washington Post reporter who had been held hostage by Iran for 18 months.

“The timing of this, despite administration protests to the contrary, suggests that this was a ransom payment,” Jonathan Schanzer, a former terrorism finance analyst with the Treasury Department and current vice president of research at the Foundation for Defense of Democracies, told TheDCNF in August.

Follow Russ Read on Twitter

Send tips to russ@dailycallernewsfoundation.org.

TheDCNF investigative reporter Richard Pollock contributed to this report.

Content created by The Daily Caller News Foundation is available without charge to any eligible news publisher that can provide a large audience. For licensing opportunities of our original content, please contact licensing@dailycallernewsfoundation.org.