Congress and Obama Agree on Something: Iran Should Pay Victims

Tehran wants to avoid compensating 1,300 American victims of terrorism.

A bombing in October 1983 in Beirut killed 299 Marines.

Photographer: PIERRE SABBAGH/AFP/Getty Images

A Supreme Court case on compensating victims of terrorism gives House Republicans and the Obama administration a chance to agree about Iran for the first time in a long time.

With bipartisan support, the House is weighing in on a pending case in which Tehran is trying to avoid paying the American victims of terror attacks linked to the Iranian government, including the 1983 bombing of the Marine barracks in Beirut and the 1996 bombing of the Khobar Towers in Saudi Arabia.

At issue is whether Iran’s central bank, Bank Markazi, will be forced to pay damages to over 1,300 American plaintiffs. Some are victims of attacks the U.S. government has linked to the Iranian government. Others are surviving family members of such victims.

Although U.S. courts have found the Iranian government culpable for the attacks and ordered payment, Iran has never admitted responsibility and never abided by the U.S. judicial system’s calls for it to pay billions of dollars in awarded damages. However, in 2008, the victims discovered that Bank Markazi had almost $2 billion stored in Citibank accounts in New York. The victims sued for that money, and the litigation has now reached the Supreme Court.

In 2012, President Barack Obama issued an executive order blocking all of Bank Markazi’s assets held in the U.S., preventing the Iranian government from taking them back to Iran. At the same time, Congress passed the Iran Threat Reduction and Syria Human Rights Act of 2012, which included a provision that made it easier for the victims to get the funds that the administration blocked.

Some experts say the administration could do more to help the victims, such as considering the victims' claims before giving Iran access to as much as $150 billion that is being returned from foreign banks to Tehran as part of an international deal to monitor and limit Iran's nuclear program.

"If the administration was serious about helping these victims, they could have structured the nuclear agreement in a way that provided them with their compensation from the frozen oil revenues," said Mark Dubowitz, executive director of the Foundation for Defense of Democracies. 

Instead, the fight over the $2 billion is nearing an end. In October, the Supreme Court decided to hear the case. The Obama administration has already filed a brief urging the court not to overturn the decisions of the circuit and appeals courts, which awarded the victims the frozen funds. Today, the House of Representatives will file a brief, which I obtained, to support the administration’s position.

"The House has taken action to help more than 1,300 Americans -- victims of Iranian-sponsored terrorism and their families -- recover the damages they deserve from the Central Bank of Iran,” House Speaker Paul Ryan told me in a statement. “Nothing can heal the horror of terrorism, but the U.S. must do everything in its power to deliver justice to its victims.”

Ryan said that if the Supreme Court sides with Iran’s central bank, the victims of the Beirut bombings, the Khobar Towers bombing and several other terrorist attacks will be left without aid. He also said that if the court strikes down the law, the legislative powers of the Congress could be “dangerously compromised.”

The amicus brief was filed by the Bipartisan Legal Advisory Group, a committee that oversees such matters made up of the House leaders of both parties. The leaders also circulated a "Dear Colleague" letter to lawmakers, 226 of whom signed on to support the brief.

Bank Markazi, in its brief, says that Congress should not be able to pass a law intended to change the outcome of a particular court case and accuses Congress of doing so in the 2012 legislation. The bank asked the U.S. federal courts to decide whether that violates the constitutional separation of powers.

The House is not denying it changed the law to help terror victims get the money; in their brief, lawmakers defend their right to do so.

Iran took its grievance to the judicial branch because it did not find an ally anywhere else in the U.S. government. On most issues of Iran policy, the Obama administration is fighting with Congress -- largely because the White House is trying to work with Tehran to implement the nuclear deal. But on this one case, the White House, Republicans Congressional Democrats seem to agree. To get that $2 billion from Iran, the victims need to convince just one more group: the justices.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

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