Congress, State Dept. close to deal on Libya-related victim compensation

Congress and the State Department are inching closer to a resolution in the battle over compensation from Libya for terrorism victims.

A draft bill is circulating on Capitol Hill that would recognize a universal settlement brokered between the Libyan and U.S. governments for relatives of terrorism victims.

 {mosads}The legislation could be introduced this week. Aides to one of the main champions for terrorism victims, Sen. Frank Lautenberg (D-N.J.), have been working on the bill. Talks between the State Department and the Libyan government have been ongoing since the spring.

Hundreds of millions of dollars in court settlements are still owed by Libya to terrorism attack victims, according to their attorneys. The Libyan government was linked to several bombings that killed or injured dozens of Americans during the 1980s.

 More recently, however, American and Libyan officials have sought to normalize their relationship. Libya halted its weapons of mass destruction program in 2003.Three years later, the U.S. removed the country from its list of state terrorism sponsors.

While past tensions have cooled considerably, Lautenberg has pressured the State Department to remember the compensation owed to victims of terrorism. The New Jersey Democrat has denied funds for an American embassy in Tripoli and has held up a nomination for U.S. ambassador there.

His most aggressive measure was a provision that allows attorneys for terrorism victims to place liens on assets of former and current state sponsors of terror in order to fund their clients’ compensation. It passed earlier this year as an amendment to the defense authorization bill.

Since then, attorneys for terrorism victims have sent notices to oil companies, law firms and other U.S. companies warning them that their assets could be seized due to their relationship with Libya.

Several oil and gas companies have lobbied against Lautenberg’s provision. The North African country has the largest proven oil reserves in Africa. It now gets more than half of its gross domestic product from oil and natural gas production, according to the Energy Information Administration.

A discussion draft of the legislation that was obtained by The Hill says that once the secretary of State certifies that the U.S. government has received the settlement payments, Libya and its business partners will be granted immunity from Lautenberg’s provision.

That certification must be sent to the House and Senate Foreign Relations and Judiciary committees. The secretary of State can also seek funds from different entities — most likely U.S. companies — to help pay compensation for the terrorism victims. The State Department’s decisions would not be open to judicial review.

In addition, the draft includes a “sense of Congress” provision that lawmakers support President Bush’s efforts to provide fair compensation to terrorism victims through a comprehensive settlement with Libya.
The draft could meet with resistance from some attorneys of terrorism victims. Some families opposed a similar legislative proposal, dated July 2, that was sent to Capitol Hill by the State Department, according to representatives of terrorism victims.

“More people would end up with minimal or no recovery,” said Thomas Fortune Fay, an attorney for the victims. He believes the State Department will settle for less money than is owed to the victims based on the court decisions.

Fay represents victims of the 1986 La Belle discothèque bombing, which has been linked to the Libyan government. The Berlin disco was popular with American servicemen and -women. Two people died in the bombing and more than 140 were injured.

But others said in reaction to the July 2 proposal that it was a victory for Lautenberg’s provision.

“It proves the Lautenberg provision worked, because the Libyans would not be at the table without it,” said Steve Perles. “When the oil companies started receiving liens, that’s when Libya started getting serious about moving these cases through an administrative process.”

Perles also represents the La Belle attack victims with Fay, as well as several other plaintiffs involved with different terrorist bombings that have been linked to Libya.