Sotloff's parents told they could be prosecuted for paying ransom to IS

The parents of murdered journalist Steven Sotloff were told by a White House counterterrorism official at a meeting last May that they could face criminal prosecution if they paid ransom to try to free their son, a spokesman for the family told Yahoo News Friday night.

"The family felt completely and utterly helpless when they heard this," said Barak Barfi, a friend of Sotloff who is serving as a spokesman for his family. "The Sotloffs felt there was nothing they could do to get Steve out."

The journalist's father, Art, was "shaking" after the meeting with the official, who works for the National Security Council, Barfi said. The families of three other hostages being held by the militant group Islamic State were also at the White House meeting, sources told Yahoo News. 

The Sotloff family issued their statement after Diane Foley, the mother of murdered journalist James Foley, told ABC News that her family took statements by the White House counterterrorism official about legal bars to paying ransom as a "threat, and it was appalling. ... We were horrified he would say that. He just told us we would be prosecuted."

The Sotloffs “heard the same thing the Foleys did,” Barfi said in his statement to Yahoo News.

Addressing the issue at a White House press briefing today, press secretary Josh Earnest declined to discuss conversations that administration officials had with the families, but said: "We have found that terrorist organizations use hostage taking and ransoms as a critical source of financing for their organizations and that paying ransoms only puts other Americans in a position where they're at even greater risk."

Earnest also said that "elements of the U.S. government were willing to take a significant risk and expend significant resources" to secure Foley's release. President Barack Obama was "so convinced that this was a priority" that he ordered a team of several dozen U.S. special operations forces into Syria earlier this summer in an attempt to rescue several American captives, including Foley. Once on the ground, the operators found that the hostages had been moved.

The murders of Foley and Sotloff, both of whom were beheaded by IS, were called "acts of barbarism" by Obama in his speech Wednesday night announcing a military campaign to destroy the terrorist organization.

Sources close to the families say that at the time of the White House meeting the Sotloffs and Foleys — after receiving direct threats from IS — were exploring lining up donors who would help pay multimillion-dollar ransoms to free their sons. But after the meeting those efforts collapsed, one source said, because of concerns that "donors could expose themselves to prosecution."

Although European hostages have been freed through ransom payments that have run into the millions of dollars, the Obama administration has taken a hard line against any such payments, viewing the transfer of cash as a violation of federal laws that forbid providing "material support" to a terrorist organization.

"They've been stricter than any administration on this," said a former law enforcement official who has been working with the families of IS hostages.

Barfi said that within a few hours of the White House meeting, he was at a separate meeting with State Department officials. One of those officials repeatedly mentioned the "material support" law and made it "clear," said Barfi, that criminal prosecutions could result if ransoms to the IS terrorists were paid.