By Walter Pincus. Washington Post Staff Writer. The Washington Post. Sunday, July 30, 2000; Page A02
A bill that would use the frozen assets of nations that allegedly support terrorism to compensate their U.S. victims has started moving through Congress, but the Clinton administration warns that it could cost U.S. taxpayers $400 million or more.
Under law, the frozen assets are protected from U.S. court judgments if the president, as he has done, declares it in the national security interest to leave them untouched. That has meant, for instance, that families of three members of the group Brothers to the Rescue, who were shot down by
Cuban fighter planes over the Florida straits in 1996, have been unable to collect multimillion-dollar judgments against the Cuban government.
But the bill, called the Justice for the Victims of Terrorism Act, would prevent the president from waiving the law--thus permitting terrorism victims or their families in the United States to collect judgments against countries listed by the State Department as sponsors of terrorism. The
measure, which primarily affects assets of Iran and Cuba that have been frozen here, was approved by the House last week and sent to the Senate.
Republicans believe the bill puts President Clinton--and therefore the Gore presidential campaign--in a difficult situation. "It's going to be very interesting when we're able to send it over to President Clinton to see if he vetoes this because if he does, what he's saying, in effect, is
that he's taking the side of terrorist states against the legitimate interests of the United States and American citizens," said Rep. Lincoln Diaz-Balart (R-Fla.), a leader of anti-Castro forces in Congress.
Rep. Bill McCollum (R-Fla.), chief sponsor of the measure and a candidate for the Senate, complained that the U.S. government has not done enough to help the Brothers to the Rescue families collect on their court judgments. The three families were awarded separate but related judgments totaling
$48 million in compensatory damages and $132 million in punitive damages, plus nearly $20 million in post-judgment interest and costs. McCollum said the United States has frozen $150 million or more in Cuban assets, but the administration has offered a settlement of only $50 million to the
families--a "paltry" sum, he said.
"It's just inconceivable to me why this administration has blocked this up to this point," McCollum said.
The White House said this week that it has been trying to work out some compromise that would result in payments to all the victims, but it remains opposed to the legislation as drafted.
Treasury Deputy Secretary Stuart E. Eizenstat has told Congress that if terrorist victims or their families are able to take their awards from $400 million of Iranian funds frozen in a Pentagon foreign military sales account, U.S. taxpayers would eventually pick up the tab.
The military sales account, which represents money paid by the Iranian government for military aircraft more than 20 years ago, was frozen--along with billions more of Iran's money in this country--when U.S. embassy employees were taken hostage in Tehran in 1979.
Since then, the money has been tied up as billions of dollars' worth of U.S. and Iranian claims, dating to 1979, have been slowly settled by the Iran-U.S. Claims Tribunal under an agreement that led to the release of the hostages in January 1980.
If Iran prevails on its claim for this Pentagon money and if the $400 million has since been paid to U.S. families, as the House-passed bill would permit, Iran "can seek to enforce its award against U.S. property anywhere in the world, since the awards of the Iran-U.S. Claims Tribunal are
enforceable in the courts of any country," Eizenstat told Congress.
A spokesman for McCollum disagreed, saying the measure "will not cost the taxpayers anything." He said U.S. government lawyers could refuse to pay the Iranians, arguing they should go to court and try to get the funds returned from those victims or families who have received them.
Another pocket of frozen Iranian funds is the roughly $5 million a year the United States collects for rental of Iranian government properties in the United States. That money, too, will be due for Iran when diplomatic relations are reestablished.
The major claimants in the United States who have received awards that would qualify under the proposed legislation include:
* The family of Alisa Flatow, who in March 1998 was awarded $22.5 million in compensatory damages and $225 million in punitive damages against Iran. Flatow was killed in a terrorist attack in Israel allegedly carried out by Iran-backed Hezbollah.
* Hezbollah hostage victim Terry Anderson and his family, who in March 2000 were awarded $41.2 million in compensatory damages and $300 million in punitive damages against Iran.
* Three hostages seized and held by Islamic terrorists in Lebanon--David Jacobsen, Joseph Cicippio and Frank Reed--who were awarded a total of approximately $20 million in compensatory damages against Iran.
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