Hours after the Libyan deposit, President George Bush signed an order
that would grant immunity to the Tripoli regime from any suit filed by
American victims of Libyan attacks. The executive order would also dismiss
compensation suits pending in U.S. courts.
Libya has been charged with masterminding the bombing of a Pan Am
passenger jet during a flight over Scotland in 1988, in which 270 people
were killed. The Qaddafy regime was also accused of the bombing of a German
disco in 1986 in which two U.S. soldiers were killed.
In 2003, as part of a reconciliation accord, Tripoli agreed to pay $2.7
billion to the families of the Pan Am victims. Libya, however, withheld the
final payment of $540 million as Congress demanded compensation for the
attack on the German disco. Other Americans sued the Libyan government for
the hijacking of EgyptAir 648 in 1985.
"The next step in the process is for us now to look at the procedures
for actually making the distributions of the amounts, which is a matter
that's in exclusively U.S. hands," Welch said. "We will also arrange for the
distribution of the remaining funds in other pending cases."
Officials said Libya and the United States have established a $1.8
billion fund for the victims of American and Libyan attacks in the 1980s.
They said $300 million would be provided by U.S. companies for the families
of 40 Libyans killed in a U.S. air strike in 1986, days after the Berlin
bombing.
"From the point of view of the United States government," Welch said,
"we had some concerns which were very simple: No U.S. taxpayer dollars would
be used for
this arrangement, and we would not countenance pressure, either from us or
from others, upon any U.S. institutions or firms to make contributions."
The assistant secretary said the Libyan fulfillment of its obligations
was conducted in three payments. The first was a Libyan deposit of $300
million on Oct. 9. On Oct. 30, Tripoli relayed $600 million, and the
following day, another $600 million.
Officials said the administration's priority was to win congressional
approval of its nominee, Gene Cretz, as ambassador to Libya. They said the
State Department also hoped to acquire congressional funding to build an
embassy in Tripoli.
By 2009, the administration would consider expanding dual-use as well as
the first military exports to Libya, officials said. They said Libya has
already been offered U.S. non-combat aircraft and subsystems.
"We have some ideas in mind about further things we might do even before
Jan. 20 [when Bush leaves office]," Welch said.
