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Terry Anderson suffered for nearly seven years in a Lebanese prison cell after he was taken hostage in 1985 and tortured by members of Hezbollah, an Iran-backed terrorist group. He was released in 1991, but his life was never the same. Anderson gave up his job at the Associated Press, where he had been chief Middle East correspondent. He vowed to make Iran pay. Anderson and his family won a massive default judgment a few months ago in U.S. District Court against Iran — $41 million in compensatory damages, $300 million in punitives. Now comes the hard part: collecting the money. Iran has plenty of assets, but international law doesn’t permit U.S. lawyers and courts to seize that nation’s property within its own borders or to file a lien against Iran’s diplomatic property. So Anderson and his lawyers at D.C.’s Crowell & Moring have been working behind the scenes within the government for months. In the latest effort to help U.S. victims of foreign terrorism, a bill that would permit Anderson and other victims to collect from a $400 million Iranian account here is advancing swiftly and stands a good chance of overwhelming approval in Congress later this month. “It’s not really about money for the victims,” says Crowell’s Karen Hastie Williams, who has helped lead the lobbying charge. “The victims don’t want money. They want to inflict pain on the terrorist nations.” Crowell & Moring has teamed up with other well-connected firms representing other American terror victims with claims against foreign governments, including Cuba. Opposition is coming from an unlikely place. The Clinton administration, while reiterating its abhorrence of terrorism, has launched a major counter-effort in Congress to stop the measure. The administration claims that permitting people in Anderson’s position to get hold of so-called blocked assets of a foreign nation — assets held up by presidential order for foreign policy reasons — would result in untold harm to U.S. national security. “Our blocking programs simply cannot function … if blocked assets are subject to attachment and execution by private parties, as the proposed legislation would permit,” Deputy Treasury Secretary Stuart Eizenstat told the Senate Judiciary Committee last fall. “The ability to use blocked assets as leverage against foreign states that threaten U.S. interests is essentially eliminated.” Nonsense, counters Anderson, who wrote in an op-ed article last week in the Wilmington, Del., News Journal that he relishes the irony of “President Clinton and his very top aides battling furiously to keep several hundred million dollars of Iranian money out of the hands of American victims of Iranian terrorism.” Eizenstat says, “We are committed to working with Congress to try to find a solution that is fair to the victims while also protecting important foreign policy interests of the United States.” AWAITING PAYMENT Anderson isn’t alone in the fight. A series of similar cases against nations on the Clinton administration’s list of state sponsors of terrorism have been filed in federal courts, mostly in the U.S. District Court for the District of Columbia. The vast majority have been uncontested by the foreign nation and led to defaults, but not one cent has yet been collected by victims as a result of the judgments. In 1997, the families of three American pilots in the Brothers to the Rescue anti-Castro group were awarded $183 million by Judge James Lawrence King in the Southern District of Florida after the Cuban military downed the flyers’ planes in 1996, killing them. The families are being represented in court and on the Hill by Ronald Kleinman, a partner in the D.C. office of Miami’s Greenberg Traurig, who has been active in the lobbying along with Williams. In 1998, the family of Alisa Flatow, an American student studying in Israel who was killed by an Arab terrorist in 1995, received a $247.5 million award in U.S. District Judge Royce Lamberth’s courtroom. A suit on behalf of Rich Higgins, a U.S. Marine colonel and U.N. observer who was murdered in Lebanon in 1990, will go to trial next month before U.S. District Judge Colleen Kollar-Kotelly. And a case on behalf of Thomas Sutherland, a professor who was held hostage in Lebanon for 5 1/2 years, will proceed before U.S. District Judge Thomas Penfield Jackson in the fall. And on May 23, U.S. District Judge Paul Friedman rejected Iraq’s bid to dismiss a case brought by four people imprisoned and tortured in that country in the 1990s. Among them were David Daliberti and William Barloon, kidnapped from Kuwait in March 1995 and held for 126 days before being freed after the intervention of then-Rep. Bill Richardson, who was sent by President Clinton to secure their release. Cases on behalf of other victims are likely to be brought later this year. None of these suits could have been filed were it not for earlier pieces of legislation, starting with a 1996 act that removed a foreign nation’s sovereign immunity in cases of state-sponsored terrorism. That measure enjoyed the strong support of the Clinton administration. Under that law, an amendment to the Anti-terrorism and Effective Death Penalty Act, a nation like Iraq, Iran, or Cuba that is on the president’s official list of state sponsors of terrorism can be sued in a U.S. court if the plaintiff or the victim is a U.S. national. In 1998, Congress passed another amendment permitting punitive damages in certain cases. That amendment, however, also permitted the president to waive the law’s provisions if he believed national security required it. But rather than waive the law on a case-by-case basis, as its proponents expected him to do, President Clinton immediately signed a blanket waiver, thus effectively barring terrorism victims from seizing any foreign assets to satisfy a judgment. That left people like Anderson and the Flatow family in the anomalous position of having the right to bring a case — but no way of collecting any money once they won it. FORGOTTEN FUND Plaintiffs lawyers found, however, that Iran holds title to some $400 million in funds in a noninterest-bearing account administered by the Department of Defense and held at the U.S. Treasury. This money, located in what is known as a Foreign Military Sales Trust Account, has been sitting there for more than 20 years. It represents the remnants of nearly $10 billion in Iranian assets seized, or “blocked,” by President Jimmy Carter after the Shah fell in 1979. The money was intended by the Shah’s regime for the purchase of arms, and most of the cash was returned to Iran in exchange for the safe release of the U.S. Embassy hostages in 1981. The pending legislation would open up that money to possible attachment in the Anderson case or in another case against Iran. It would also apply to any other case against a terrorist-sponsoring nation — if a pile of similar funds or other types of property belonging to that nation can be found in the United States. “The bill is a waiver of U.S. sovereign immunity,” says Stuart Newberger, Williams’ partner at Crowell & Moring and Anderson’s lead trial attorney. “It does not apply to diplomatic or consular property. But it does apply to cash in the bank, or the proceeds of commercial activity.” Newberger has already filed writs of attachment with the clerk of the District Court, formally notifying Treasury Secretary Lawrence Summers as nominal holder of the funds. The attachments will be pursued further if the bill passes. Waiving the United States’ sovereign immunity is necessary since the funds are technically under the control of the executive branch, explains Williams, who was a high Office of Management and Budget official in the Carter administration. But the Clinton administration, for which Treasury’s Eizenstat is acting as the point man, has raised strong objections to the bill. “The Clinton administration has sent its troops up to the Hill, warning congressmen in private briefings of dire damage to the budget and U.S. foreign policy if the bill passes,” Anderson said last week in his op-ed. The lead Senate sponsors are the bipartisan duo of Connie Mack, R-Fla., and Frank Lautenberg, D-N.J. On the House side, the lead sponsors are Bill McCollum, R-Fla., Barney Frank, D-Mass., and Howard Berman, D-Calif. In addition to the potential loss of leverage in dealing with renegade nations like Iran, Eizenstat has also cited in testimony the possibility that other nations will retaliate against U.S. property located in their territory. According to Williams, who has met with Eizenstat twice, Eizenstat has offered a resolution to the dispute that would involve payments of money directly from the U.S. Treasury to Anderson and other victims as compensation for their ordeals. The former hostages reject this because it would not involve any financial bite on the foreign country. Several congressional and other sources say the bill is ensured passage in the Senate as long as the leadership is able to secure unanimous consent to bring it to the floor. In the House, a Judiciary markup is expected this week, with the possibility of a floor vote this month. Williams says that even if the bill passes and is signed into law by the president, the administration is likely to tie it up in litigation for years. “These people who have suffered the horror of terrorism,” she says, “would have to suffer additionally the indignity of years of litigation against their own government.”

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