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Libya, Lockerbie families reach $2.7 billion settlementU.S. skeptical of tentative pact
From Elise Labott
WASHINGTON (CNN) -- The Libyan government and lawyers for families of the 270 people killed when Pam Am Flight 103 was blown up over Scotland in 1988 have come to a tentative agreement on a $2.7 billion settlement, according to documents obtained by CNN. But a State Department official told CNN the Bush administration was "skeptical" of the tentative pact, which hinges on Libyan acceptance of responsibility for the bombing. The proposed deal, a copy of which was obtained by CNN, was sent to the families Tuesday. The families still have to decide whether to accept the terms. Under the agreement, Libya would pay the $2.7 billion into an escrow account that would be released in phased segments over 10 months to a year. The families would not have access to all of the money -- about $10 million per victim -- until after U.N. and U.S. sanctions are lifted and Libya is removed from the State Department's list of state sponsors of terrorism. The first step of the agreement calls for Libya to take certain actions, including admitting responsibility for the attack and denouncing terrorism. Libya must also cooperate with future investigations of the bombing. At that point the United Nations would formally terminate sanctions against Libya, which currently are under suspension. Once the U.N. sanctions are lifted, $4 million would be released from an escrow account to each family. Once unilateral U.S. sanctions against Libya are lifted, Tripoli would pay an additional $4 million to each family, with the remaining $2 million to be paid once Libya is removed from the U.S. list of state sponsors of terrorism. Pan Am Flight 103, en route from London to New York, was brought down by a bomb over the Scottish hamlet of Lockerbie on December 21, 1988. All 259 people on the plane were killed, as well as 11 people on the ground. Sanctions were placed on Libya after U.S. and British investigators alleged that Libya was behind the Pan Am disaster. A Libyan intelligence agent was convicted last year of masterminding the bombing. The settlement agreement was hammered out by attorneys for the families and a committee of Libyans authorized by the Libyan government to negotiate. The victims' representatives have not had direct access to Libyan leader Moammar Gadhafi and other government officials, but lawyers for the families have said the Libyan government was engaged throughout the negotiating process. A similar settlement between the two sides reached in May failed to materialize when, after news of the agreement was announced by the families' lawyers, the Libyan government denied that it had made any official offer of compensation. A State Department official told CNN Tuesday the United States will examine the latest proposed deal, but the Bush administration remains skeptical that Libya will actually admit responsibility for the bombing. The official said there is currently no plan for Assistant Secretary William Burns, who has been representing the Bush administration in talks between the Libyan and British governments, to hold a new round of talks. This official said that although Libya has declared in the past it would be willing to accept responsibility to end the matter, it has failed to do so. "We are looking at this with a very cynical eye given how many times Libya has promised to say the magic words," the State Department official said. "People here will have to take a look at this and talk to the families. There is a lot yet to do." Although in the past U.S. officials have said that a mere Libyan acceptance of responsibility for acts undertaken by its officials would suffice, this official said the United States was likely to demand an admission that the Libyan officials "acted on instructions of the government." "Gadhafi has said all along Libya had nothing to do with this, so it will be tough for him to satisfy the U.S. requirements and keep from losing face in the international community at the same time," the official said. Daniel Cohen, whose daughter Theodora Cohen, 20, died in the crash, also said that the tone of Libya's acceptance of responsibility would determine whether he and other families decide to accept the offer. Cohen said the families have not yet been presented with any ideas of what Libya's statement might constitute. However, Cohen said that while he still had problems with the offer, it was "a more realistic settlement" than the agreement disclosed in May. That deal said the compensation settlement would be held in escrow for up to five years while the Libyans waited for the United Nations and United States to lift their respective sanctions. The latest deal calls for the funds to be disbursed within a year. "But the basic flaws are all still there," Cohen said, adding that he did not believe the United States would lift its sanctions any time soon. Cohen, a major opponent of the United States normalizing relations with Libya, has problems with the fact that the payment of money by Libya to the families is tied "to other things than compensation" for the bombing. He said while he would accept the installment payments for Libya accepting responsibility and the lifting of the U.N. sanctions, he would not accept money for the United States lifting its own sanctions or taking Libya off the terrorism list. "I won't be paid off for the United States improving relations with Libya," he said.
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