U.S. to Examine Libyan Offer

WASHINGTON —  The Bush administration said Wednesday that the United States would not lift sanctions against Libya based solely on its government’s offer of $2.7 billion as compensation for the 270 people killed in the bombing in 1988 of Pan Am Flight 103 over Scotland.

But Secretary of State Colin L. Powell called reports of the proposal a move forward and said the U.S. would examine the offer once it is formally made and the terms are relayed to Washington.

“Just reading press accounts of what has been said about the offer, it certainly is a step in the right direction, but I don’t think it resolves the entire issue, resolves all the outstanding issues that have to be dealt with with respect to Libya and Pan Am 103,” Powell said after a meeting with Yemeni Foreign Minister Abubakr al Qerbi.

“We are waiting to see what the actual Libyan offer is,” Powell said. “It’s not yet formally put on the table. And we’ll examine it when we see all of its elements.”

The State Department earlier Wednesday called the offer of $10 million for each victim a “highly significant factor” in determining whether Libya meets the demand for compensation, one of four conditions imposed by the United Nations and the United States in order to lift a variety of economic, travel, arms and other embargoes against the regime of Moammar Kadafi.

But by itself, the offer does not satisfy U.N. resolutions or U.S. demands for full acknowledgment by Libya of its role in the terrorist attack--the most important condition for many families as well as a top priority for the U.S. government. The other two conditions are disclosing information and renouncing terrorism.

The bombing killed all 259 passengers and crew members on the jet as well as 11 people on the ground. Investigators quickly linked Libyans to the attack, and sanctions against Kadafi’s government were imposed.

In 1999, the North African nation handed over two Libyans who had been indicted in the bombing by a Scottish court. They were tried in the Netherlands, a neutral site agreed to by Libya. One defendant was convicted last year; the other was acquitted.

“If the families work out a compensation agreement, that would be a highly significant factor in our considering whether Libya in fact was starting to meet some of these requirements of the U.N. resolutions,” State Department spokesman Richard Boucher said. “But we’ll not be in a position to seriously address bilateral issues with Libya until the U.N. requirements are met.”

The Libyan offer came under immediate attack from congressional leaders, including Sen. Edward M. Kennedy (D-Mass.), a member of the Judiciary Committee.

“U.S. policy will be determined by changes in Libyan behavior, not by conditions imposed by the Libyan government on compensation for the families of Pan Am 103,” Kennedy said.

The issue of compensation was thrown into a bit of disarray Wednesday when a Libyan official was quoted as denying that any formal offer had been made. Families of victims as well as U.S. and British officials had been told that a deal was imminent.

“It is possible that businessmen or legal experts held talks with the lawyers of the victims’ families, but this was outside the Libyan state, and I ... state that Libya, officially, was not a party to these talks,” Foreign Minister Abdel Rahman Shalgam told Associated Press.

A similar statement was distributed by the government-run Libyan news agency Jana. But Associated Press later quoted Libyan officials as confirming that a “preliminary” deal was in the works.

In New York, the law firm of Kreindler & Kreindler, which represents the families of 118 victims, insisted Wednesday that the talks with Libya, which have taken place over the last 10 months, had reached the general parameters of a settlement.