The commander of Iran’s Basij militia said that the $1.7 billion the United States agreed to pay Iran to settle outstanding debts was a ransom for the release of five American hostages over the weekend, Iran’s semi-official Fars news agency reported on Wednesday.

“This money was returned for the freedom of the US spy and it was not related to the [nuclear] negotiations,” said Brig. Gen. Mohammad Reza Naqdi.

U.S. officials insisted that the payment was to settle a claim that Tehran had against Washington for a $400 million arms purchase prior to the Islamic revolution in 1979. The U.S. agreed to add a $1.3 billion interest payment to the principal it was returning.

In explaining the settlement on Sunday, Secretary of State John Kerry said:

Iran will receive the balance of $400 million in the Trust Fund, as well as a roughly $1.3 billion compromise on the interest. Iran’s recovery was fixed at a reasonable rate of interest and therefore Iran is unable to pursue a bigger Tribunal award against us, preventing U.S. taxpayers from being obligated to a larger amount of money.

Kerry added, “All of the approximately 4,700 private U.S. claims filed against the Government of Iran at the [Hague Claims] Tribunal were resolved during the first 20 years of the Tribunal, resulting in payments of more than $2.5 billion in awards to U.S. nationals and companies through that process.”

Lee Smith of the Hudson Institute noted during an exchange on Twitter with Ned Price, spokesperson for the National Security Council, that the money awarded to American citizens by the Tribunal was in fact paid by the U.S. government through the Judgment Fund, which Price acknowledged was also used to settle the Iranian claims. “US paid twice—to Iran and US citizens. Iran has never paid at all,” wrote Smith.

In addition to repaying the debt and lifting nuclear-related sanctions on Iran, the U.S. released seven Iranians convicted or suspected of sanctions-related offenses, and promised not to pursue the arrest of 14 others who are wanted for arms smuggling.

Shortly after the American hostages were freed by the regime on Saturday, it was reported that three U.S. citizens were abducted by Iran-backed militias in Iraq.

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