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Taxpayers Need an Iraq Claims Program

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Friday, 12 November 2010 00:00

By Mauricio J. Tamargo

We are all familiar with the old adage; "the squeaky wheel gets the grease".   Nowhere is that old adage more true than when dealing with the federal government helping Americans with claims against Iraq.  A case in point is the news out of the U.S. Embassy in Baghdad last year that an agreement had been reached to compensate Americans terrorized by the regime of Saddam Hussein.

In the period leading up to the first Gulf War, and to a lesser extent after that war, many U.S. citizens and companies suffered injuries caused by the Hussein regime.  In 1991, the U.S. federal government conducted an Iraq Claims Census to determine the universe of parties harmed by the Hussein Iraqi government and the scope of the losses incurred by American citizens.  At that time, the value of these claims rose to seven or eight billion dollars.  This figure could be significantly higher in light of the interest that customarily accumulates, so long as a claim remains outstanding, and is applied to international claims under international law in accordance with established international legal standards.

These claims listed on the census represent money owed to U.S. taxpayers as a result of numerous types of offenses committed by Iraq, such as torts, expropriations, and a multitude of commercial claims, plus the long neglected claims of the injured sailors of the U.S.S. Stark ship.  Settling these claims involves a rather complex process of law, diplomacy, and, at times, raw politics. In the case of U.S. corporations, these claimants may have a legal obligation to their shareholders and a moral obligation to their employees to pursue compensation for their unresolved claims against Iraq.

According to a U.S. official, the government of Iraq has agreed to settle some outstanding Iraqi obligations to American victims of terror to a tune of $400 million, a mere fraction of the total U.S. claims currently pending against Iraq.  The principal reason that these American victims of terrorism were covered by a preliminary U.S.-Iraq agreement is because their attorneys made it clear to the U.S government that they should be compensated. These same lawyers also lobbied the Congress for over ten years and, eventually, successfully inserted language into appropriation bills and other legislation to bring long overdue closure and justice in these cases.

It is good that this agreement was made, but there remain large numbers of other individual and commercial claimants that also need resolution for their outstanding unresolved claims. For this reason, the Obama Administration must authorize the Foreign Claims Settlement Commission, at the U.S. Department of Justice, to commence an Iraq Claims Program and resolve these outstanding claims.

Customary international claims law and the International Claims Settlement Act of 1945, govern the resolutions of disputes like the ones at issue here. Under these laws, the Iraqi government is liable to U.S. citizens, including corporations and companies, for internationally recognized damages caused by the Hussein government.  This system relies on U.S. citizens asserting their rights and demanding to be compensated.  Up until now, it does not seem as if many commercial claimants have taken up the issue of their outstanding claims to resolve them.

And, due to the lapse of time since the injuries occurred, as well as business mergers and acquisitions that have occurred since the 1990s when the injuries occurred, presently, most companies may not even know they are owed money by the Iraqi government. In order for the complete normalization of trade relations between the U.S. and Iraq to take place, a claims settlement agreement must be signed by both governments which would be binding on all of their citizens. It is not known how far the current negotiations between the Iraqi government and the U.S. have already progressed. International settlement agreements talks may take months or maybe even years but, based on this article from last year, the talks with Iraq appear to be making forward progress.

Unlike the recently established Libya Claims Program being conducted ta the Foreign Claims Settlement Commission, these U.S. claimants with claims against the government of Iraq are at a distinct disadvantage because they are not party to the pre-settlement process. This agreement between the U.s. and Iraqi governments will be a very important document as it will settle certain pending claims that each country has against the other. More importantly though, the agreement will surely contain a clause that relieves each country of further liability. This type of exemption from further liability clause is typically required in these types of agreements so as to entice the other country to sign, knowing that this will be the last time that country will be forced to pay claims.

At a time of such great economic suffering and high unemployment in the U.S., the U.S. government is morally obligated under international claims law, to exercise its discretionary authority and stand up for the rights of its own citizens.  Some of these claims are owed to companies that have received federal bailout money during the past few years. These monies could go a long way in putting Americans back to work, retiring national or corporate debt, or even modernizing factories.

Although it seems logical that the Administration would espouse the claims of all of its citizens, that assumption should not be taken for granted. Although the U.S. government has the jurisdiction to stand up for the rights of its own citizens, it has not always done so. U.S. espousal of these claims is less likely if the injured U.S. citizens have not demanded to be compensated or even asked for assistance.

Those Americans who represent the proverbial “squeaky wheel” reported last year to have reached a settlement agreement with Iraq are not resting until their rights are asserted--nor should other Americans with unresolved claims.  It is finally time for an Iraq Claims Program to be established and commence so that all American claimants are treated equally, fairly, and ultimately compensated for their injuries and losses at the hands of or caused by the Iraqi government.

 

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