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Administration Blocks Ex-Hostages' Bid for Damages From Iran

"The problem is you have had some greedy lawyers" who have blocked efforts at a comprehensive solution because it would limit a big payout, said Rep. Frank R. Wolf (R-Va.), who wrote to Rice last month to urge the administration to come up with a "fair, just and equitable system." He said: "You have to have something that cuts the lawyers out."

The administration proposed a plan in 2003 that would have given any victim of terrorism $262,000. But only one hearing was held in the Senate, and the idea has languished, largely because of complaints that the amount was too low.

The former hostages of Iran have benefited from two laws, passed in 1980 and 1986, that among other things gave them tax breaks, paid their educational expenses and provided a "token detention benefit" of $50 for each day in captivity. In bringing a lawsuit, they must overcome the terms of the diplomatic agreement that led to their release but has also put the State Department directly in their path.

The agreement, known as the Algiers Accords, codified the 1981 deal between the United States and Iran under which the hostages were released, billions of dollars in Iranian assets were unfrozen, and an arbitration tribunal was established in the Netherlands to settle claims between the two countries. In the first part of the document, the United States pledged that it "will be the policy of the United States not to intervene, directly or indirectly, politically or militarily, in Iran's internal affairs." Elsewhere, the United States pledged to "bar and preclude" any claims filed by the hostages against Iran.

For the hostages, the situation is rich in irony. The State Department, in legal arguments and on Capitol Hill, has maintained that allowing the hostages' case to go forward will violate the Algiers Accords. But Rice has announced a $75 million plan to bolster democracy in Iran and to foster opposition to the theocracy that controls the country. The hostages say Rice's program violates the prohibition on interfering in Iran's affairs; Iran has also filed a complaint with the United States through the Swiss Embassy, which handles U.S. interests in Tehran.

"This administration has not been shy about breaking international agreements," said Barry Rosen, who was press attache at the U.S. Embassy and who now heads the Afghanistan Education Project at Columbia University's Teachers College. "The administration appears to be in contradiction of itself. It seems to me the Algiers Accords should be dead and buried."

Rosen, angry that others have "laid claim to millions and millions of dollars of compensation," added: "This may sound weird, but if I were made aware of that agreement, I would have stayed in Iran."

U.S. officials say that supporting democracy does not amount to interference under international law. And they say abrogating the Algiers Accords, though not a formal treaty, would be viewed overseas as a serious breach of international norms, harming U.S. interests. U.S. banks and companies have been able to settle claims with Iran because of the accords, while the United States has been forced to pay about $900 million to Iran for contract violations and property damage.

William J. Daugherty, a CIA employee who spent 425 days in solitary confinement during the crisis and is now a college professor, said the State Department is being "deceitful and dishonest." He added that "you can't argue that getting people to rise up against their government is not interfering in a country's affairs." He said that, after taxes, the check he received under the 1986 detention benefit was $17,000. "This came from the U.S. taxpayer, which none of us wanted to happen," he said. "We have always wanted Iran to pay for what it did."

Spokesman J. Adam Ereli said that the State Department supported the 1980 and 1986 measures giving direct benefits to the former hostages and that now the administration favors a "comprehensive program" for victims of international terrorism, including the former hostages.

"These brave people are members of the State Department family and are true heroes," Ereli added. "We are committed to having a full and open discussion about any issues they want to raise, and we will do our best to address them."

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