Updated

Syndicated columnist and Fox News contributor Charles Krauthammer told viewers Wednesday on "Special Report with Bret Baier" that the $400 million cash airlifted to Iran that coincided with the release of four American hostages was "illegal."

The State Department insisted that the payment was an installment for a failed arms deal from 1979.

"It isn't only that they are just looking ridiculous in denying that it was a quid pro quo. Obviously it wasn't a coincidence," Krauthammer said.

Iranian press reported that the delivery was ransom payment for the release of the U.S. prisoners, and the timing was one of the reasons officials with Department of Justice raised objections to the deal, according to a Wall Street Journal report.

"There is a statute that prohibits us from engaging in Iran dealing with dollars so they had to print the money here, ship it over to Switzerland, turn it into Swiss francs and euros and ship it over to Iran," Krauthammer said.

"If a private company had done this, this is called money laundering," he added. "The CEO would be in jail right now."