Off the Hook? Libya's New Status With America May Mean It Won't Pay

June 15, 2006 — -- For the families of those killed aboard Pan Am Flight 103 nearly two decades ago, the State Department's decision a month ago today to remove Libya from the State Sponsors of Terrorism list shocked them.

Many of them had hoped that Libya would finally make good on its agreement to fully compensate the victims. Now that the African country is back in America's good graces, those expectations may be dashed. Their biggest ally keeps waffling with its support.

Glenn Johnson's 21-year-old daughter, Beth Ann, died aboard Pan Am Flight 103 when the plane was blown up by Libyan terrorists over Lockerbie, Scotland, in 1988. He couldn't believe it when he found out that Libya and the United States had renewed diplomatic ties.

"It didn't take long to turn to disappointment," Johnson said. "The State Department dropped the ball on this."

Johnson is the chairman of the board of the Victims of Pan Am Flight 103, an organization that represents most of the 270 victims' families. His organization, in close contact with the State Department, has been seeking monetary compensation from Libya for their losses for 18 years.

The victims' association and the Libyan government signed a 2003 agreement in which Libya accepted responsibility for the bombing and agreed to pay a $2.7 billion settlement to the families.

The victims' lawyers negotiated a $10 million per victim compensation to be paid in stages.

The final $2 million payment had been held in a Swiss escrow account in anticipation of Libya's removal from the terrorism sponsor list. The account has since expired, and the money was withdrawn in February 2005.

Some families said that State Department officials had told them that their agreement with Libya was a private issue and that the U.S. government could not help them. This sparked outrage among many of the families.

"The longer the meeting went, the more families got upset over what they were hearing," Johnson said.