U.S. Republican questions timing of $1.7 billion Iran payment, hostage release

WASHINGTON (Reuters) - A powerful U.S. lawmaker on Wednesday demanded Secretary of State John Kerry provide an explanation of a $1.7 billion claim settlement paid to Iran just as Tehran released American prisoners last month.

Republican Ed Royce, chairman of the House of Representatives Foreign Affairs Committee, wrote that the timing of the settlement and the administration's failure to brief Congress "has led some to express concern that the payment represents a de facto 'ransom' for the release of American hostages."

Royce asked Kerry to provide by Feb. 17 information including lists of all U.S. officials who participated in negotiations with Iran over the settlement agreement, the prisoner release and the nuclear agreement announced in July.

He also asked for legal analyses of the dispute, a timeline of negotiations over the dispute and an explanation of how the interest payment in the settlement was calculated, among other information.

On Jan. 17, the State Department said the United States and Iran had settled a longstanding claim at the Iran-U.S. Claims Tribunal, releasing to Tehran $400 million in funds frozen since 1981 plus $1.3 billion in interest.

State Department spokesman John Kirby said Kerry would respond to the letter. He did not offer further specifics on when and how.

"We can confirm receipt of Chairman Royce's letter, and as with all Congressional correspondence, we'll respond as appropriate," Kirby said.

U.S. Republican lawmakers, who are strongly critical of Democratic President Barack Obama's Iran policy, have been questioning the payment for weeks. No Republican supported the nuclear agreement when Congress had the opportunity to review it last year.

After the settlement was announced, Obama said it was a better alternative than letting more interest accumulate while waiting for a legal judgment.

(Reporting by Patricia Zengerle; Editing by Lisa Shumaker and Leslie Adler)