Do U.S. POWs Deserve $1B?

CBS News Foreign Affairs Consultant Pamela Falk is a professor of international law at the City University of New York. She has written has written extensively on victims' compensation and lawsuits against terrorist states.

But there was an unsettling picture in the courthouse: At the plaintiff's table were American former-POWs, tortured and beaten by Iraq's military during Operation Desert Storm; at the defense was the Justice Department, asking the court to block the payment of compensation to the U.S. servicemen so that the money could be used to rebuild Iraq.

The lawsuit, originally Acree v. Republic of Iraq, has stirred up veterans and victims advocates, and put the Bush administration in the uncomfortable position of choosing to spend the $1.7 billion in Iraqi funds held by the U.S. on the Iraqi people rather than for the POWs.

Earlier this month, U.S. District Judge Richard W. Roberts issued an order that a $1 billion judgment be entered against the Republic of Iraq, Saddam Hussein and the Iraqi Intelligence Service for the "savagery" suffered by the soldiers: $653 million in compensatory damages and $306 million in punitive damages to the 17 Americans.

Like the American "human shields" cases last spring, the POWs sued the Iraqi government under a 1996 U.S. law that allows civil actions against nations on the State Department's terrorist list.

They then tried to collect the money under a victims' compensation provision of the Terrorist Risk Insurance Act (TRIA), a bill passed in November of last year to pay victims of international terror.

On Wednesday, Judge Roberts reluctantly said "no" to the POWs. Referring to the administration's role in the case, he wrote, "The Secretary's position that the POWs are unable to recover any portion of their judgment as requested, despite their sacrifice in the service of their country, seems extreme."

The POWs, according to their own accounts and court documents, were beaten unconscious, shocked with cattle prods during interrogation, systematically starved and contaminated with serious illnesses.

Most had multiple broken bones, one had a fractured skull. After receiving medical treatment and testifying in court, the POWs won the right to compensation. The last thing they expected was to have the Bush Administration block the payment from Iraqi funds in the U.S.

Lt. Col. Dale Storr was shot down by Iraqi ground fire while flying an A-10 fighter aircraft.

"I was shocked," he told CBSNews.com this week after the court's ruling. "I cannot believe this is the message that the president wanted to convey: Thanks for serving the country, for going in and taking back Iraq but it doesn't matter that they brutalized you, that they tortured you, never mind that. We won't give you the money that the court said you deserve....we'll give it to the Iraqi people."

"I don't know how else to say it -- it can't be what they want to say to us, and it doesn't seem to be what Congress wanted either," Storr added.

Storr lost 37 pounds in captivity, had his nose and eardrum broken in a freezing, dark and filthy cell and was repeatedly shocked with electricity during interrogations.

The 118-page court document details how he and his fellow soldiers were tortured. Col Clifford Acree, also shot down in Kuwait, was beaten, "with such force that they broke his nose and fractured his skull."

Certainly not all POWs are able to receive compensation, but it is sweet justice when they do. When POWs are returned, it usually is because there was either an agreement between the countries or, because the war is over.

For example, the civilian hostages held in the U.S. Embassy by the Ayatollah Khomeini in Iran were blocked from obtaining awards from Iran because the U.S. and Iran signed an agreement (the 1981 Algiers Accords) transferring back dollars to Iran in exchange for their freedom.

Last spring, Americans taken hostage by Saddam Hussein as human shields during the Gulf War were awarded compensation. Their lawyer, Daniel Wolf, won an award of $97 million, which was paid from the Iraqi money in the U.S.
Almost two hundred more victims he represents may now not be able to collect. In court last year, Wolf argued that the case raised "serious constitutional questions about who makes the law, the president or Congress."

The POW case, he argued, raises constitutional questions of retroactivity, since the events took place before the president's decision to exclude Iraq from lawsuits. "The appropriations bill effectively delegated the power of repeal to the President," said Wolf, "which is not a power that the Congress can give under the Constitution."

Back in 2001, the Bush Administration also opposed the use of the frozen Iraqi assets. In March, confronted with legislation that Secretary of State Colin Powell personally lobbied against, President Bush signed an Executive Order vesting the $1.7 billion of frozen Iraqi money from U.S. banks, setting aside the $120 million for the human shields victims who had obtained judgments.

He then designated the remainder of the money for the rebuilding of Iraq, effectively closing the door to the remainder of the human shields victims and the POWs.

Why do some victims receive money and others do not? The answer is in the centuries-old law of sovereign immunity -- that the King cannot be sued. But in the years since terrorism became a threat to the United States, both Congress and the president have felt that victims should be paid from the coffers of terrorist nations. In 1996, terrorism became an exception to the Foreign Sovereign Immunities Law. During the past eight years, victims of terror have received over $1 billion in cases against Cuba, Iran, Libya and Iraq.

The Terrorism Risk Insurance Act has not changed. What changed was that in April, Baghdad fell, Saddam Hussein lost power and, in a change that appeared to surprise many of the POWs' lawyers and some members of Congress, the administration added a provision to the Emergency Wartime Supplemental Appropriations Act that gave Mr. Bush the authority to eliminate pending lawsuits against Iraq. He did so on May 7.

Thus, in the POW case Justice Department lawyers asked the court for a summary judgment setting aside the $1 billion the lower court awarded to the POWs.

Their argument: the new government in Iraq (the U.S. interim authority) is no longer promoting terrorism, and the Iraqi money seized by the U.S. is needed rebuild Iraq.

So what does the future hold for the POWs?

Gary Shiffman, a lobbyist and professor at Georgetown University who was involved in writing the victims compensation legislation and who is part of the team representing the human shields victims, appears somewhat optimistic, saying that the situation is "still moving." And, he points out, "Justice stated in court this week that a settlement from Iraqi assets is not ruled out."

"Chances are good because the president has demonstrated support for victims' rights to pursue justice, State has introduced a bill which guarantees some disbursement to all victims without extinguishing the rights of individuals to pursue justice, and Congress consistently sides with the victims," said Shiffman.

Stephen Fennell, the POWs' lawyer, said he was "shocked" by the president's opposition to the payment. He remains confident, nonetheless, that the POWs will be paid.

"We will win," he said. "There is no legislative history, no intent by the Congress to 'undo' the rights given to victims of terror,"

In the future, Congress, the courts, or the president could move off the mark. In court, the POWs will appeal, said Fennell.

But for now, the POWs might as well be hunting for Saddam Hussein along with the rest of Iraq.

By Pamela Falk