9/11 families upset by Bush cash freeze

WASHINGTON, May 29 (UPI) -- The families of two victims of the Sept. 11 terror attacks -- awarded damages against the deposed government of Saddam Hussein after convincing a court that Iraq supported al-Qaida -- have criticized a White House decision to use funds that could have paid their claims for the Iraqi reconstruction effort instead.

"We were just terribly disheartened," Katy Soulas, whose husband Timothy was killed in the 2001 attack on the World Trade Center, told United Press International. "This robbed us of the chance to make a huge statement. We wanted to use the courts to punish those who support terrorism, but this has really hurt our chances of doing that."

On May 7, Soulas and her six children -- along with the family of another World Trade Center victim, George Smith -- were awarded damages against the government of Iraq by a federal judge in New York who ruled they had shown, "albeit barely," that Iraq had provided material support to Osama bin Laden and al-Qaida.

Judge Harold Baer ruled that the two families were entitled to $104 million compensation from Iraq, bin Laden, al-Qaida, the Taliban movement and their government of Afghanistan. But he dismissed their suit against the deposed Iraqi president on the basis that -- as head of state -- Saddam enjoyed absolute immunity.

The families hoped that they would be able to get their claim paid from $1.7 billion in Iraqi assets frozen in the United States. None of the other defendants have assets accessible to U.S. courts.

But those hopes were dashed last week when President Bush transferred the frozen assets to a special fund to help re-build Iraq. Using his sweeping powers under the Patriot Act, Bush signed an executive order that indemnified the special fund -- and all Iraq's oil revenue -- against "any attachment, judgment, decree, lien, execution, garnishment, or other judicial process."

Soulas says she "wholeheartedly" supports the president and respects the need to rebuild Iraq, but adds, "This makes our victory kind of hollow."

"The money was never the issue," she went on. "This isn't about just me, it's about all the victims of Sept. 11 and all the other victims of Iraqi terror. No one should ever have to walk in my shoes or those of my children. The money that was frozen here was supposed to be used to pay these claims in the United States, and I think that's the way it should stay."

Her lawyer, Slade H. McLaughlin, told UPI that the executive order was "a terrible blow, a real kick in the pants. We went through this whole case to try and get closure for these people and then this happens."

Treasury Department spokesman Taylor Griffin says the administration's No. 1 goal "is to make sure there is no more terror. We understand the victims' concerns, but the best way to make sure there are no more victims is to stabilize Iraq, to get the country back on its feet and restore security there."

He says that when the U.S. government seized the frozen assets last month, money was set aside for all judgments then outstanding.

But, according to McLaughlin, this merely sharpens the families' sense of injustice. Just a few weeks before their award, 180 claimants who had been held as human shields by Saddam's government during the first Gulf War were paid about $118 million in damages out of the assets now earmarked for Iraqi reconstruction.

"We got a judgment just 45 days later," said McLaughlin. "The cut-off point is arbitrary. How can you justify paying one set of claims and not another with an equally valid case? It just doesn't make sense."

Daniel Wolf, who represented the 180 claimants in the so-called Hill case, agrees. He has another group of 250 human shields whose case is currently moving through the courts.

"We hope to get judgments" for this group, he told UPI, "and we hope to establish a mechanism through which they can get paid. ... These individuals went through exactly what the (Hill case plaintiffs) went through, but through an accident of timing they've been so far unable to get compensation."

Wolf points out that any transitional authority will be liable for the obligations of Saddam's regime. "Any new government is subject to the obligations of the old one unless those obligations are waived. Regime change doesn't change that. When the Republicans take over in Washington, the government's debts don't go away."

Griffin says that the administration expects further cases and is "committed to working with Congress to find an appropriate way to satisfy legitimate claims against the deposed government of Saddam Hussein."

McLaughlin says he is looking at ways to get his clients' awards paid.

"We are looking into the possibility of a legal challenge or a legislative solution," he says, a sentiment echoed by Wolf.

"My hope is that if compensation cannot be awarded through the courts, then some other mechanism can be set up to compensate them," Wolf said.

There is one interesting precedent. In the 1980s, there were attachments on Iranian assets by plaintiffs who had won commercial claims in U.S. courts during the Tehran hostage crisis in 1979-80. The U.S. government nullified those attachments -- much as it has now done with the Iraqi claims -- and set up a special tribunal from which the plaintiffs could get compensation.