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The Justice Department has asked a judge to throw out a $959 million judgment levied against Iraq for torturing American prisoners of war in 1991 — arguing that President George W. Bush has recently granted the country sovereign immunity from actions committed by the Saddam Hussein regime. The move on July 21 surprised lawyers representing 17 former U.S. soldiers and their families and threatens at least two other pending civil cases against Iraq. “I did not know this was coming,” says Stephen Fennell, a partner at Washington, D.C.’s Steptoe & Johnson who represents the ex-POWs. “The fact that they did it is still surprising me.” The government’s position, filed as a motion to intervene in the POW case, claims that Bush on May 7 removed a provision of law that allows American citizens the right to sue Iraq in federal court for terrorist acts. The Justice Department motion says that a provision included in an emergency wartime appropriations bill passed by Congress in April gave the president the authority to eliminate the handful of civil suits pending against Iraq. “Among the sanctions that were removed by the President on national security grounds is the provision that lifted Iraq’s immunity from suit in U.S. courts for certain tort claims, thereby restoring to a liberated Iraq a sovereign immunity afforded by United States law to virtually every other foreign country,” DOJ lawyer Joseph Hunt wrote in the brief. Justice Department spokesman Charles Miller declines comment. Earlier this month, U.S. District Judge Richard Roberts of D.C. issued a default judgment against Iraq in the amount of $653 million in compensatory damages and $306 million in punitive damages to the American soldiers captured and tortured by the Iraqi government in the Gulf War in 1991. On July 18, Roberts granted a plaintiffs’ request to temporarily freeze about $1.7 billion in Iraqi assets held in the Federal Reserve Bank of New York. Lawyers for the POWs have been eyeing those funds for months, but in March, Bush earmarked the money for the rebuilding of Iraq. On Wednesday, L. Paul Bremer III, Bush’s envoy to Iraq, claimed in a declaration filed in the case that paying the POW victims out of the funds held in the Federal Reserve would hamper his ability to rebuild Iraq — noting that funding has almost run out already. “[T]he budget balance for the Interim Government of Iraq for July to December 2003 shows a deficit of approximately $2.2 billion,” Bremer wrote. Roberts has scheduled a hearing for Tuesday. On Friday, Fennell filed a motion challenging the government’s position, noting there is no evidence that Congress intended to throw out the civil actions against Iraq. Daniel Wolf of D.C.’s Sprenger & Lang, who represents more than 300 Americans suing Iraq in separate cases, says the DOJ filing raises “serious constitutional and retroactivity questions.” In March, Wolf secured a payment of $95 million from frozen Iraqi assets to pay a 2001 judgment in favor of 150 Americans and their families who were used as human shields in the first Gulf War. He says the Bush administration’s position would make it impossible for an additional 180 clients, who were also allegedly held captive and beaten by the Hussein regime, to seek justice. “It is fundamentally unfair to have people who suffered and whose experiences were virtually identical — to have one side obtain justice and the other side left out in the cold,” says Wolf, who says his cases are unlikely to proceed until the POW matter is resolved. For one former POW, who was beaten and held captive by Iraq for 43 days in 1991, the government’s position is extremely disappointing. “It’s a sorry situation when our government puts more value on the former government of Iraq than the people who went there to fight that government,” says David Eberly, a retired Air Force colonel who now lives in Williamsburg, Va. Sen. George Allen, R-Va., a member of the Foreign Relations Committee, has signaled his concern over Bush’s position. “[Allen] has a hard time understanding how pending lawsuits and judgments can simply be erased,” says Michael Waldron, the senator’s communications director, adding that Allen supports the use of Iraqi assets for paying American victims’ claims. Terrorism lawyers say it is not surprising that the administration would fight the collection of an award against Iraq, especially one that tops nearly $1 billion. But, they note, the POW case could evolve into a showdown between Congress and the president, with the court’s authority trapped in the middle. “This case may be one of the flashpoints for testing the constitutional tension between Congress giving someone the right to go to court to get justice and fight terrorism and the president’s authority to conduct foreign relations and military affairs in also trying to fight terrorism,” says Stuart Newberger, a partner at D.C.’s Crowell & Moring, who represents plaintiffs suing countries such as Libya and Iran. Since 1996, Americans have had the right to sue foreign governments in U.S. courts for state-sponsored terrorism. Plaintiffs have secured monetary awards, but have found collecting judgments nearly impossible. Both Republican and Democratic administrations have blocked attempts to use frozen foreign assets to pay domestic judgments, arguing the money may be needed for political negotiations. Victims have taken their stories to Congress, which has acted on numerous occasions to try to make it easier for victorious litigants to collect from terrorist-sponsoring governments. These efforts, however, have been met with tough resistance by the executive branch. Last November, President Bush signed into law a massive terrorism insurance bill that included a provision allowing Americans to collect court-ordered compensatory damages from frozen assets of terrorist states. Since March, when President Bush ordered Iraq’s frozen assets to be seized and used for the rebuilding of Iraq, lawyers suing the country knew they would have a hard time recovering funds for their clients. As a last resort, the victims could face the prospect of suing the U.S. government to get relief — a step some plaintiffs’ lawyers say they would be reluctant to take. In May, a phrase was tucked into the Emergency Wartime Supplemental Appropriations Act of 2003, which DOJ lawyers claim gave Bush the authority to wipe out the pending civil actions against Iraq. Bush’s actions on May 7 were taken two months before Roberts rendered his 118-page decision awarding judgment in favor of the former POWs. The president’s actions, however, were not publicly known until the DOJ’s motion to intervene was filed July 21.

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