Libya Compensation Offer for Pan Am Flight 103 Reported at $10 Million Per Family

Libya has offered to pay $10 million per family as compensation for the deaths of 270 people in the 1988 Pan Am 103 bombing, lawyers representing the family said Tuesday.

They said the Libyan offer was a "vast multiple" of settlements paid in any other aviation or terrorism case.

At $10 million per family, the combined compensation would come to $2.7 billion. Of the 270 victims, 181 were Americans.

The lawyers have been negotiating with the Libyans for years, with a view toward reaching a settlement that would permit the lifting of both U.N. Security Council and U.S. sanctions against Libya.

The State Department has not been involved in the negotiations. A senior department official expressed doubt that the Bush administration would approve the arrangement.

The New York-based Kriendler & Kriendler law firm, discussing the case publicly for the first time, outlined the status of the negotiations in a five-page letter to family members. Copies were made available to the news media.

Under the agreement, the money would be placed in escrow and released piecemeal as the sanctions against Libya are revoked: 40 percent when U.N. sanctions were lifted, 40 percent with removal of U.S. commercial sanctions and 20 per cent when Libya was removed from the State Department's list of sponsors of international terrorism.

In England, the Rev. John Mosey, who lost his 19-year-old daughter, Helga, in the attack, said the money would go some way toward "lightening the burden" of his family's loss. Mosey said, however, he would believe the money was forthcoming only when he saw a check, and in any case it would not deter the families from pressing their long-held demand for an independent inquiry.

"Obviously, it's just another chapter closed, and one can't pretend that one isn't pleased," Mosey said, "but it's not compensation, it's blood money."

The senior U.S. official, who spoke on condition of anonymity, said the administration would not feel bound to comply with the arrangement.

The official predicted Congress would reject it as well. He said the United States could not commit to lifting sanctions unless Libya came into in full compliance with Security Council demands.

Last year, a Scottish court convicted a Libyan intelligence agent, Abdel Basset Ali al-Megrahi, of murder for smuggling an explosive aboard the Dec. 21, 1988, flight. A co-defendant was acquitted.

All 259 people on the plane were killed. Eleven more in Lockerbie, Scotland, died after being hit by falling debris.

Besides compensation for families, the Security Council also has demanded that Libya renounce terrorism, acknowledge responsibility for the crime and disclose all it knows about it.

Paul Wilkinson, director of Terrorism and Political Violence Studies at St. Andrews University in Scotland, said he hopes the news means Libyan leader Moammar Gadhafi now plans to meet requirements of the United Nations.

If these conditions were met, the United States conceivably would lift its sanctions. The United States has barred most Americans from using their passports for travel to Libya and U.S. oil companies from operating there. In addition, Libya, as one of seven countries on the terrorism list, is subject to a series of economic sanctions.

"Libya has no doubt been motivated into doing this by a desire for sanctions against the country to be lifted," Wilkinson said.

Libya has shown indications of moderating its behavior recently, a point underscored in the State Department's annual report on terrorism released last week.

"Libya appears to have curtailed its support for international terrorism, although it may maintain residual contacts with a few groups," the report said.

Discussing Libyan compliance with U.N. demands, the Kriendler & Kriendler statement noted that Libya met the requirement years ago that al-Megrahi be turned over for trial. The firm also said the Libya has substantially met the requirement that Libya renounce terrorism.

As for Libyan acceptance of responsibility for the bombing, it said negotiations on that issue involving the United States, Britain and Libya may soon be concluded successfully. It added that the requirement for compensation will soon be met, based on the $2.7 billion Libya offer.