Former Iran Hostages Seek Compensation

Some Say Claims Interfere With U.S. Foreign Policy

Stuart E. Eizenstat , who currently heads the firm Covington and Burling's international practice and was Deputy Treasury Secretary in the Clinton administration, was online Monday, March 20, at 1:30 p.m. ET to discuss why he feels compensation awards for hostages held in Iran could interfere with foreign policy.

Read Administration Blocks Ex-Hostages' Bid for Damages From Iran , ( Post, March 19, 2006 )

The transcript follows.

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Anonymous: It seems as though the former hostages are pitting public opinion and a taste for revenge against against the honour of keeping America's word and our reputation in the world. The courts have very properly ruled foreign governments outside their jurisdiction. The state department makes the obvious point that liquidating diplomatic assets is a bad - and dangerous- precedent. They want Iran held to account for its actions. Don't they know that Iran would welcome this, if America were at the same time held responsible for its role in the 1953 coup and since? The Ayatollah Khomeini often made wildly outlandish charges, for instance, calling our embassy 'a den of spies.' And yet, in today's Post article, the man lamenting that his $17,000 check came from American taxpayers was in fact an employee of the CIA! Are the American people- and the American people- capable of understanding any complexity beyond 'Yay-us, boo-them'?

Stuart E. Eizenstat: While I do not approve of the tone of the question, I support the general thrust of the comment, and likewise support the Administration's decision on the following grounds. Permit me to say in advance that the Iranian hostage crisis was very much a part of my life for 444 days, during which I was President Carter's chief domestic adviser in the White House. It was a personal tragedy for the hostages, who suffered grievously, but also helped lead to the defeat in 1980 of President Carter. So I greatly sympathize with their plight. As Deputy Secretary of the Treasury, I also negotiated the so-called Mack-Lautenberg Amendments in 1980, which led to other victims of terrorism receiving large sums of money.

But there are several reasons why the Administration is on sound ground in opposing a recovery by the American hostages through the the US court system. First, a recovery would clearly violate the Algiers Accords in which the Carter Administration, supported by the incoming Reagan Administration, agreed that in return for releasing the hostages unharmed, the US pledged to "bar and preclude" any claims arising out of the hostage taking. The Accords also unfroze billions of dollars of Iranian assets in the US and established a Claims Tribunal in the Hague, which has awarded over $2.5 billion to American corporations and individuals whose property was wrongfully taken by the Iranian government. For the US to be seen as breaching an international agreement which was the basis for releasing the hostages, would undermine our credibility in many other diplomatic matters. The Court of Appeals, the US Claims Court and the US Supreme Court have all upheld the Accords.

Second, the only real Iranian assets out of which to satisfy any court judgments are Iran's diplomatic property, which are protected from seizure by private individuals under the Vienna Convention. To violate this international agreement, would subject our diplomatic property abroad to similar treatment.

Third, there is a very real equity arguments. In 1980, the Brothers to the Rescue families, whose loved ones were shot down by Cuban MIGs over international waters joined political forces with families who had lost loved ones from Iranian-financed terrorism. The Clinton Administration did not favor this legislation, but I was a principal negotiator with the two leading Senators. In the end, although most in Congress and the public thought that Iranian assets were being used to pay these victims (who had court decisions in their favor), in fact, $380 million of recovery from the US Treasury-- American taxpayers. It is unfair to allow those with good political contacts to jump over those who go uncompensated, like the hostages.

Thus, there should be a comprehensive solution. The Administration proposed in such a solution in 2003 for all civilian victims of international terrorism, but the amounts they would pay each victim ($262,000) was too paltry to satisfy Congress and victims' families. I proposed then and support now a similar approach, but with a payment of $1 million to each victim.

In point of fact, Congress in 1996 created a cause of action by American citizens injured by countries, like Iran, on the terrorist list, effectively ending their sovereign immunity from suit. But Congress did not create an effective remedy for those who recover. Only a flat per capita payment can do this. It is unfair to encourage Americans to go through costly litigation, and then have no effective way to recover what they get in court.

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Bethesda, Md.: Reading the article I got to wondering: How many of the former Reagan administration Iran-Contra criminals that the current Bush administration has appointed to key positions have a role in negotiating this issue?

Stuart E. Eizenstat: As strongly as I opposed the actions of the Iran-Contra figures in the Reagan Administration, the Algiers Accords were negotiated by the Carter Administration, of which I was a part, and have been supported by every Administration since. The Clinton Administration, of which I was a part, opposed the Mack-Launtenberg amendments in 1980, because they would have required use of US taxpayers' money to pay victims of terrorism without a comprehensive scheme. In the end, Jack Lew, then OMB Director, and I negotiated the best deal we could. The amount of US dollars paid to victims, over $300 million, will be sought against the Iranian government if we ever normalize relations with them.

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Falls Church, Va.: Hasn't the administration abrogated the Algiers Accords with its pro-democracy effort and funding of opposition groups in Iran?

Stuart E. Eizenstat: The Algiers Accords, in addition to barring any claims against Iran for the release of the hostages, and transferring all American claims in US courts to the Tribunal in the Hague, also stipulated that the US would "not intervene, directly or indirectly, politically or militarily, in Iran's internal affairs." The Administration contends that the funds it has sought to promote democracy in Iran do not violate this part of the agreement. While this may be a close call, it is no reason for the US to back away from the basic precepts of an Accord that permitted the safe return of our American hostages.

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Parkville, Md.: It seems to me that compensation to victims of state terror should be decided and ruled upon by an international criminal court that treats all citizens of all nations fairly.

However, the U.S. would never abide by the ruling of such a court, so victims of U.S. state terror (i.e. torture victims unlawfully "rendered" to third countries by U.S. intelligence operatives) would never see any such compensation.

Stuart E. Eizenstat: I do not think the answer is to have an international court make these judgments. Rather, those Americans, particularly those in government service, who have been killed or injured by international terrorism, should have a congressionaly created administrative process to make per capita payments up to $1 million per person. This is simpler, avoids excessive legal fees, and is more equitable.

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Nashville, Tenn.: Given the following assumptions:

1. A U.S. citizen has a valid claim for damages due to the actions or inaction of a foreign government.

2. Allowing that claim to go forward may damage the foreign policy interests of the United States, so the U.S. government blocks the recovery lawsuit - effectively "taking" the interest of that private citizen for the benefit of the government.

Question: Could that individual seek recovery from the U.S. Government as a "taking"?

Stuart E. Eizenstat: This is a good question. Several years ago, this very "taking" claim was made by victims of terrorism, but was rejected the US Court of Claims.

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Washington, D.C.: Isn't there some way we can make things right for these poor people?

Stuart E. Eizenstat: Yes. First, the hostages did receive certain tax breaks, and educational expenses, along with a token detention benefit of $50 for each day of captivity. This is obviously inadequate. But it is important than in trying to help the hostages, we create an equitable program that can be used by other American civilian victims of terrorism. Otherwise, each individual or group will feel another group got special treatment. That is why I favor a flat $1 million payment per victim, including the Iranian hostages.

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Portland, Ore.: It seems to me that after all these years of bad relations, the frozen assets are more symbolic than a real obstacle to better relations.

Sure, if we give the Iranians back their money it would be an olive branch, but some compensation to the hostages seems just to me and that's the logical place to obtain it. That doesn't mean that the legal outcome equals winning the lottery, but if for over one year of their lives taken away, each hostage got between $1 million to $2 million as compensation for their suffering, what would be the harm?

The only argument that seems to make sense to me is if the amount awarded is too high as to seriously detract from the olive branch aspect of this.

Comments?

Stuart E. Eizenstat: I agree. But please recognize that there are no Iranian assets in the US, except for protected diplomatic property, out of which compensation could be paid. Thus, this would have to be a US taxpayer financed system, one I would support if there was an appropriate level of compensation, like $1 million per person.

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Paul Lewis: I read the first question with some interest. I was at the American Embassy during the takeover. A member of our group was asked by a US Senator why we had not made use of the 1996 provisions. We hired counsel as you must do so in order to file the necessary suit. Since the U.S. government intervened in our case, we have heard much about a comprehensive bill to cover us, as well as the Marines killed in Beirut, the Embassies in Africa, and others. I will note that we hear this, but have seen no movement on that front.

Stuart E. Eizenstat: I share your frustration. Congress created an empty right in the 1996 bill, allowing American victims of terrorism to sue countries who sponsor terrorism, like Iran, but with no effective way of recovering. In the Brothers to the Rescue case, part of Mack-Lautenberg in 2000, we did use part of some frozen Cuban assets in the US. But this was hardly fair to over 5900 claimants who have had their claims against Castro validated by the US Claims Settlement Commission, for both assassination of family members and confiscated property, but have not yet received a dime. By using political lobbying the Brothers to the Rescue jumped over all these victims. That is why a comprehensive US program for victims is essential.

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Philadelphia, Pa.: If business entities are able to tap into compensation from Iran, why can't individuals be compensated?

Stuart E. Eizenstat: Please understand that under the Hague Tribunal process in The Netherlands, both individuals and businesses have pursued claims-- and have recovered a total of some $2.5 billion. The US government obligated itself to recover US property taken in Iran.

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Anonymous: I am confused. You favor $1 million per person for compensation, and they received $50 per day plus education consideration. Isn't there a gap between these two figures? How much have the hostages received, and if it is less than $1 million, would you have no objection to raising their compensation so it totals $1 million?

Stuart E. Eizenstat: Yes. The amount they received from the 1980 and 1986 legislation is very inadequate. I would favor giving them $1 million total, deducting the amounts they have already received. However, I would favor this only in the context of comprehensive legislation providing the same payments to other victims, past and present of international terrorism.

Thank you all for your excellent questions. I enjoyed participating and will now sign off, since my time is about to expire.

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