- The Washington Times - Thursday, December 31, 2015

Under a little-noticed provision in the new law to compensate U.S. victims of terrorism, taxpayers are stepping up to pay what the nations responsible for the terror attacks will not.

A section of the legislation that President Obama signed into law on Dec. 18, just before leaving for a Hawaiian vacation, sets up a “United States Victims of State Sponsors of Terrorism Fund” that is paid for with a $1.025 billion appropriation from the U.S. Treasury.

The fund will provide $4.4 million in compensation for each of the 53 Americans who were held hostage for 444 days by Iran after the takeover of the U.S. Embassy in 1979. The fund will also provide another $600,000 for a spouse or child of each hostage.

In addition, the new fund will also pay up to $20 million to victims of state-sponsored terrorism who received final court judgments against such countries as Iran, Cuban, Sudan, Syria and North Korea.

However, none of this money will be paid directly by Iran or other state sponsors of the attacks against the victims.



The legislation sets aside $3.8 billion of a $9 billion civil settlement the Department of Justice collected this summer from French bank BNP Paribas over sanctions violations, but the rest of the money will come from future settlements over sanctions violations — and taxpayers.

Some watchdog groups are questioning why U.S. taxpayers must come up with billions of dollars while Iran and other guilty parties refuse to pay a dime, and the administration has not looked to assets from those countries it controls.

“It is extremely odd that the U.S. had $150 billion of Iranian assets embargoed and released in the recent Iran nuclear treaty, and, somehow, the Obama administration didn’t deduct the hundreds of millions in compensation owed these victims from the total released,” said Richard Manning, president of Americans for Limited Government, a federal spending watchdog.

“The U.S. taxpayer is now going to pay the compensation owed to these and other victims of terrorism on behalf of the terrorists, and what’s worse is that the victim’s attorneys will be taking a 25 percent bite out of the total payment,” he continued. “The whole thing just leaves me scratching my head.”

For obligating billions of dollars from the Treasury to pay victims of acts of terrorism carried out by other countries, Congress wins this week’s Golden Hammer, a weekly distinction awarded by The Washington Times highlighting examples of wasteful or questionable federal spending.

In a post published by the Lawfare blog, John Bellinger, a national security lawyer who has served as legal counsel to the State Department, the White House and the Department of Justice, questioned a separate provision of the new law to pay the hostages’ lawyers, again with taxpayer dollars, for their work.

Although the rate is lower than private practice contingency fees, Mr. Bellinger wrote, “some may be surprised that a fiscally conservative Republican-controlled Congress would authorize payments of more than $250 million from the U.S. Treasury to private attorneys, even on behalf of victims of terrorism deserving compensation.”

Others have criticized the size of the payouts for the Iran hostages and other victims of terror, which, according to a Washington Post report, are far greater than the amounts the government will pay to families of members of the military who have been killed, wounded or held as prisoners of war in overseas conflicts — including those who died in the failed 1980 mission to rescue the Iranian hostages.

In fact, the law’s compensation levels far exceed the amounts recommended in previous terrorism victim compensation bills drafted by the George W. Bush administration in 2003.

Those drafts would have provided terrorism victims compensation equal to the benefits for public safety officers killed in the line of duty, which was about $262,000 at the time. Now that amount is about $339,000, according to the Department of Justice.

Still, lawmakers and spending experts argue that the proposal, while not ideal, is necessary because the Iranian hostages and other victims absolutely deserve compensation, whatever the source.

“These people were taken hostage in the U.S. Embassy. This is compensation for the damage done on U.S. government property,” said Ryan Ellis, tax policy director at Americans for Tax Reform, noting the State Department has opposed efforts by victims’ lawyers to directly sue foreign states such as Iran in U.S. courts.

Pete Sepp, president of the National Taxpayers Union, said it was “difficult to second-guess” the decision not to sue governments directly, adding he hoped future compensation efforts bring “swifter justice for those who are injured by state-sponsored evildoers.”

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