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Rival Groups of Terror Victims Square Off

While Senators in recent days fought a public battle over an Iran sanctions bill, lawyers and lobbyists for victims of terrorist attacks were quietly jockeying over a few words in section 503 of the legislation.

At stake, both sides say, is more than $2 billion in frozen Iranian assets.

Representatives of victims of the 1983 bombing of a Marine barracks in Beirut have been lobbying for months for wording that they say would help them and other victims gain access to the pot of money in a New York bank.

They contend that lawyers for another group of victims have out-lobbied them so that injured parties of a 1996 attack on the Khobar Towers complex in Saudi Arabia may get priority to access the funds.

The Khobar Towers side says it wants to share the funds and alleges that the Beirut victims’ lawyers are trying to get all the money.

All involved agree Congress needs to act to help free up the cash to pay out judgements they have already won in U.S. courts.

The sanctions bill was delayed by in-fighting among Senate Republicans over an amendment from Sen. Rand Paul (R-Ky.) that would ban the authorization of military force in Iran. The Senate passed an amended version of the measure Monday night.

The wording of section 503 favors the Khobar Towers side, said Andy Cochran, a lobbyist for the Marine barracks plaintiffs. That’s because it would include punitive damages, in addition to compensatory damages, and “doing that breaks the sharing agreements we’ve made with other families and breaks our promises we made with House Republicans,” Cochran said.

Late Monday, Cochran said, the sides reached a tentative deal to limit some of the damages and come up with a compromise in the conference committee. An agreement had looked unlikely earlier in the day.

An attorney with DLA Piper for the Khobar Towers side said an opposing lawyer told him they were at war.

“We are not looking to get all the money,” said the DLA Piper attorney, who spoke on the condition he not be named. “The Marine barracks people would get the largest part of it.”

The DLA Piper lawyer said the Marine barracks side is aiming for language that would retroactively change the Foreign Sovereign Immunities Act.

“That will give the Marine barracks people all the money, and the Air Force officers who were killed at Khobar Towers would get nothing,” the DLA Piper attorney said.

But Cochran and a lawyer for the Marine barracks side had disagreed, saying the DLA Piper attorneys were setting up a multiyear legal challenge for the Iranian money on behalf of their clients.

Lynn Smith Derbyshire, a spokeswoman for the victims of the Beirut bombing, said she fears she could now get nothing after losing her brother, Vincent Smith, in the attack.

“The main thing is to take the money away from the government of Iran,” she said. “To have the tables turned this way, to be in a position that maybe we’ll get nothing or very, very little, I don’t even have words for it.”

A spokeswoman for Sen. Bob Menendez (D-N.J.), who authored section 503, said her boss had been working to make sure all victims would have access to the money.

Menendez “for months has been working with all of the plaintiff groups to ensure that the approximately $2.5 billion in Iranian blocked assets located in New York are available,” Tricia Enright, Menendez’ communications director, said in an email.

Steven Perles, founder of the Perles Law Firm, which represents the Marine barracks side, said Menendez was stuck between groups of plaintiffs.

The Senator “had nothing but good intentions … and nobody deserves to be in this position,” Perles said.

The DLA Piper lawyer said the Senate bill is fine. Even including punitive damages, his Khobar Towers clients would be entitled to only $600 million, he said. “The Marine barracks people are entitled to a much larger amount than we are,” he said.

The lawyer added that the only reason his side hasn’t signed an agreement with the Marine barracks attorneys is because that side won’t agree to not try to “slip something into a conference version.”

Perles said the feuding among the families isn’t a good sign.

“My observation over the years is that when terror victims squabble in public like they’re doing now, they end up getting nothing,” he said.

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