Senior Justice Department officials raised objections to the U.S. flying the equivalent of $400 million in cash to Iran around the time four detained Americans were released this past January, the Wall Street Journal reported Wednesday.
On Tuesday, the paper reported that the money was flown to Iran in an unmarked cargo plane as the first installment in a $1.7 billion settlement of a failed 1979 arms deal.
According to the Journal, Justice Department officials raised concerns that the timing of the transfer would make it appear to be a ransom payment for the detainees. The officials did not object to the settlement itself.
"People knew what it was going to look like, and there was concern the Iranians probably did consider it a ransom payment," a person familiar with the discussions told the Journal.
The Journal also reported that Justice Department officials expressed concerns about both the number of Iranian prisoners freed by the U.S. and the number of sanctions violations cases that would be dropped as part of the two agreements. The report said most of their objections were overruled by the State Department.
A Justice Department spokesperson said Wednesday that the agency would not comment on "internal interagency deliberations." The statement added that the Justice Department "fully supported the ultimate outcome of the Administration’s resolution of several issues with Iran," including the arms deal settlement and the detainees' release.
The State Department has previously denied the cash transfer was connected to the release of the hostages. Late Wednesday, a senior State Department official told Fox News, "This was fully an interagency decision, and that any notion that the State Department had the power to simply overrule is false."
Earlier Wednesday, White House spokesman Josh Earnest said it was "not accurate" to describe the payment as ransom.
"No, it was not," Earnest said. "It is against the policy of the United States to pay ransom for hostages."
Late Wednesday, a spokesman for U.S. Central Command denied the Defense Department had any role in transferring the money to Iran.
Fox News' Lucas Tomlinson contributed to this report.