Iran’s Assets Now Fair Game

By Nathan Guttman

Published December 18, 2007, issue of December 21, 2007.
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Washington - Congress approved new legislation this week enabling families of terrorism victims to go after hidden assets of foreign governments accused of sponsoring terrorist groups. The bill, which passed with overwhelming support in both the Senate and the House despite strong opposition from the Bush administration, opens the door for the enforcement of multimillion-dollar lawsuits against the governments of Iran and Libya.

The main beneficiaries of the new legislation are families of the 241 Marines killed in a 1983 bombing in Beirut by Hezbollah, but the bill also opens up legal avenues to compensation for the families of victims of other attacks by the Lebanese group as well as by Hamas. Both groups are sponsored by Iran.

Although an American court, after ruling in 2001 that the Iranian government was liable for the Beirut bombing, granted the victims’ families $2.65 billion in damages, until this week the inability to take over Iranian assets in the United States had frustrated the families’ efforts to enforce the ruling.

“We need to make those responsible pay the price, so I’ll know my brother’s death was not in vain,” Lynn Smith Derbyshire told the Forward. Derbyshire lost her brother, Vince Smith, a captain, in the attack and now serves as a spokeswoman for the victim’s families. “I loved my brother dearly,” she said. “He was my hero, and I think we cannot allow the criminals who are responsible for killing him to get away with murder.”

The new legislation is an attempt to improve and broaden the landmark 1996 Flatow Amendment, which paved the way for lawsuits against states sponsoring terrorism. The amendment was named after Alisa Flatow, who was killed by Islamic Jihad in a terrorist attack in Israel in 1995.

Under the bill, relatives of terrorism victims will be able to actively go after assets held in private and corporate bank accounts linked to the government of Iran. Lawyers for the victims estimate that the value of hidden Iranian assets in the United States totals some $4 billion to $6 billion.

“This legislation significantly increases the ability of terror victims to enforce judgments,” said Steve Perles, a Washington attorney who represents families of the Beirut bombing victims.

The measures approved by Congress this week also introduce uniform federal standard damages for victims of terrorism, thus overriding the ability of states to set damage standards, a practice that has led to significant variation in damages awarded to victims from different states.

While enjoying wide bipartisan support in Congress, the bill was strongly opposed by the Bush administration. In a letter to lawmakers, the State Department wrote that the legislation “threatens significant U.S. foreign policy interests” because it “undermines the president’s authority to implement sanctions and obtain leverage against terrorist states under the International Emergency Economic Powers Act.”

Congressional sources told the Forward that the legislation addresses all concerns raised by the State Department and that the bill will actually help in negotiations with such countries as Libya once they see the economic consequences of their actions.

The legislation was sponsored by two Jewish senators, Democrat Frank Lautenberg of New Jersey and Pennsylvania Republican Arlen Specter. “My bill will allow victims of state-sponsored terror to have their day in court,” Lautenberg said in a statement put out after Friday’s vote.

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