- The Washington Times - Saturday, November 1, 2008

Libya has paid $1.5 billion into a fund to compensate the families of American victims of Libyan-linked terror attacks in the 1980s, clearing a final hurdle to full normalization of ties between Washington and Tripoli.

In exchange, under a deal worked out earlier this year, President Bush on Friday signed an executive order restoring the Libyan government’s immunity from terror-related lawsuits and dismissing pending compensation cases, the White House said.

State Department spokesman Sean McCormack called it “a laudable milestone” giving “a measure of justice to families of U.S. victims of terrorism and clearing the way for continued and expanding U.S.-Libyan partnership.”

The money will go into a $1.8 billion fund that will pay $1.5 billion in claims for the 1988 Pan Am Flight 103 bombing over Lockerbie, Scotland, and the 1986 bombing of a German disco. Another $300 million will go to Libyan victims of U.S. air-strikes ordered in retaliation for the disco bombing.

Libya has sought donations from private businesses to help cover its share of the fund. The Bush administration has vowed that no American taxpayer money will be used for the U.S. portion but has not said where the money will come from.

The final deposit had been expected in early September but was inexplicably delayed, angering some in Congress who have thus far refused to lift holds on the nomination of a new U.S. ambassador to Libya and funds for the construction of a new U.S. Embassy in Tripoli.

But on Friday, the chief congressional critic, Sen. Frank R. Lautenberg, New Jersey Democrat, welcomed the final payment.

“American victims and their families have waited decades for Libya to pay for its deadly acts of violence and today they have received long-overdue justice,” he said. “I am pleased that our relentless pressure and support for terror victims has led to this historic moment.”

A first partial payment to the fund was received on Oct. 9, just days after the opening of a U.S. trade office in Libya’s capital and a historic visit there by Secretary of State Condoleezza Rice, who was the highest-ranking U.S. official to visit the country in more than 50 years.

U.S.-Libya relations hit a low point in the 1980s but began to improve after Libyan leader Moammar Gadhafi - whom President Reagan called the “mad dog of the Middle East” - renounced weapons of mass destruction and terrorism in 2003.

The rapprochement stalled after Libya halted payments to the families of Lockerbie victims under a previous compensation deal that would have paid $8 million to each and in the absence of an agreement on the La Belle disco bombing in Berlin. But it picked up again in August when Libya and the United States agreed to a new, comprehensive package that would cover compensation for all the 1980s-era claims.

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