The controversy with the American prisoner release by Iran continues to grow as The Wall Street Journal reports the Obama administration agreed to lift sanctions on the same day of the release:

The U.N. Security Council’s delisting of the two banks, Bank Sepah and Bank Sepah International, was part of a package of tightly scripted agreements—the others were a controversial prisoner swap and transfer of $1.7 billion in cash to Iran—that were finalized between the U.S. and Iran on Jan. 17, the day the Americans were freed.

U.S. officials said Brett McGurk, a senior State Department official, and an Iranian government representative signed three documents in Geneva, Switzerland, on January 17. One document demanded “the U.S. to dropping criminal charges against 21 Iranian nationals, and Tehran to releasing the Americans imprisoned in Iran.” The second document stated the U.S. deliver $400 million to Tehran “and arrange the delivery within weeks of two subsequent cash payments totaling $1.3 billion to settle a decades-old legal dispute over a failed arms deal.” The third document outlined lifting the sanctions.

As soon as the men signed the documents, the pieces began to move:

The Americans were released, Iran took possession of the $400 million in cash, and the U.N. Security Council removed sanctions on Bank Sepah and Bank Sepah International, these officials said.

“Lifting the sanctions on Sepah was part of the package,” said a senior U.S. official briefed on the deliberations. “The timing of all this isn’t coincidental. Everything was linked to some degree.”

Also, during that time, Iran and the West agreed on a nuclear deal. The Obama administration told Congress they would only lift sanctions “on companies and individuals tied to Iran’s nuclear development.” They insisted sanctions “on those involved in missile development” would remain.

So much for that:

The U.S. Treasury Department sanctioned Bank Sepah, Bank Sepah International and its then-chairman in 2007 for their alleged role in backing Iran’s missile program. The designation didn’t mention what direct role the entities allegedly played in helping Iran’s nuclear program.

At the time, the Treasury said that Bank Sepah and Bank Sepah International had provided financial support to Iranian-state owned companies and organizations developing Iran’s missile program. These included Iran’s Aerospace Industries Organization and the Shahid Hemmat Industries Group

“Bank Sepah is the financial linchpin of Iran’s missile procurement network and has actively assisted Iran’s pursuit of missiles capable of carrying weapons of mass destruction,” the Treasury said in a January 2007 statement.

The fiasco surrounding the prisoner release came to light in August when The Wall Street Journal reported that the U.S. handed over $400 million to Iran on the same day. President Barack Obama said the payment “represented the first installment of a $1.7 billion settlement the Obama administration reached with Iran to resolve a decades-old dispute over a failed arms deal signed just before the 1979 fall of Iran’s last monarch, Shah Mohammad Reza Pahlavi.” The payment was not a ransom:

“We do not pay ransom. We didn’t here,” Obama said. “We don’t — we won’t in the future — precisely because if we did, then we would start encouraging Americans to be targeted, much in the same way that some countries that do pay ransom end up having a lot more of their citizens being taken by various groups.”

The timing of the $400 million payment, Obama said, “was, in fact, dictated by the fact that as a consequence of us negotiating around the nuclear deal, we actually had diplomatic negotiations and conversations with Iran for the first time in several decades. So the issue is not so much that it was a coincidence as it is that we were able to have a direct discussion.”

However, many people thought it looked like a ransom payment. The Justice Department even asked Obama to delay the payment because officials knew it would look bad. Everything only became worse for the administration because Pentagon officials claimed the White House never told them about the money transfer.

With everyone saying different things, the State Department finally confirmed the rumors:

State Department spokesman John Kirby was asked at Thursday’s press briefing: “In basic English, you’re saying you wouldn’t give them $400 million in cash until the prisoners were released, correct?”

“That’s correct,” Kirby replied.

Kirby continued:

“We deliberately leveraged that moment to finalize these outstanding issues nearly simultaneously,” he said. “With concerns that Iran may renege on the prisoner release, given unnecessary delays regarding persons in Iran who could not be located as well as, to be quite honest, mutual mistrust between Iran and the United States, we of course sought to retain maximum leverage until after American citizens were released. That was our top priority.”