U.S. Still Balks at Linking Iran Funds, Hostages

The Bush Administration on Tuesday brushed aside an Iranian hint of help in freeing American hostages in exchange for the release of Iranian funds that were frozen in the United States after the seizure of the U.S. Embassy in Tehran a decade ago.

“Our position is the same as it’s always been, that we are not willing to link the Iranian assets questions to the hostage question,” White House Press Secretary Marlin Fitzwater said. “That fits within the definition of our policy of not trading arms or money or whatever for hostages and of not paying ransom for hostages.”

The Tehran Times, in a report distributed by the Islamic Republic News Agency, called on Washington to guarantee the return the Iranian assets--estimated variously at $2 billion to $4 billion--as the first step in a process that could lead to the release of the American hostages being held by Islamic militants in Lebanon.

Sure of Husband’s Death

Meanwhile, Marine Maj. Robin Higgins, wife of hostage William R. Higgins, told reporters at the Pentagon that it is no longer possible to doubt that her husband was killed by his kidnapers.

In a stoic statement, she pledged her support to President Bush “as he tries to save the living and end the suffering.”

The Tehran Times quoted what it described as a source close to President Hashemi Rafsanjani as saying: “The first step should be taken by the United States, and if Tehran gets satisfied that its assets will certainly be unfrozen, then the second step will definitely come from Iran.”

The Iranian assets, including arms purchased by the late Shah Mohammed Reza Pahlavi but not delivered, were frozen when Washington broke relations with Tehran over the seizure of the U.S. Embassy in 1979. Iran long has demanded the return of the assets as its price for improved relations with the United States.

State Department spokesman Richard Boucher said the Iranian assets issue will be resolved by the special Iran-U.S. tribunal that is evaluating competing claims to the funds. The panel earlier decided to allocate as much of the money as is needed to satisfy valid claims by Americans against the Iranian government and to return the rest of the funds to Tehran.

There is no possibility that Iran would get the arms purchased by the shah, although the value of the weapons has been added to the frozen bank accounts and other assets.

“These issues and the process of resolving the questions of the assets have no connection or linkage whatsoever with the hostage issue,” Boucher said.

Fitzwater acknowledged that a “good many messages” have been sent between the United States and Iran through intermediaries in recent days, but he refused to say whether any messages mentioned the assets.

Despite the Administration’s rejection of the Iranian overture on assets, Fitzwater said he sees “room for improvement in relations” with Iran.

One possibility for a hostage release remains a deal involving the Islamic radicals and Israel. However, a senior leader of Hezbollah, the Iranian-sponsored group thought to be an umbrella for hostage holders, said the organization will refuse to negotiate with Israel unless the Jerusalem government first releases Sheik Abdel Karim Obeid, a Shiite Muslim clergyman seized by Israeli commandos on July 28.

Sheik Sobhi Tofaili said in a statement distributed Tuesday in Beirut that “there shall be no contacts and no negotiations” as long as Obeid remains in captivity.

Appeal to Israel

U.N. Undersecretary General Marrack Goulding, completing a visit to Israel, appealed to Israel to release Obeid without conditions. However, Defense Minister Yitzhak Rabin said that Israel would only free the clergyman in exchange for hostages including three Israeli soldiers.

Higgins’ wife said that the Marine Corps commandant had told her it is virtually certain that Higgins, a Marine lieutenant colonel seized in February, 1988, while on U.N. peacekeeping duty, is dead. The militants last week released a videotape showing a man who resembled Higgins hanging from the end of a rope.

Referring to her husband by his nickname, she said, “Rich went to Lebanon in the service of the United Nations because he believed he could be useful, that he could help and that he was needed.

“To those who would suggest that our concern for Rich should somehow be mitigated because he was in a dangerous business or because his act of volunteering was supposedly foolish, Rich himself would have the appropriate reply: ‘When you’re out front, people will shoot at you,’ ” she said.

“Now is not the time for anger and bitterness, for recriminations and blame. Now is the time for calm reflection, for kind thoughts of the man who has brought us together. Now is the time to tell Rich Higgins that we love him and we miss him.”

Times staff writer James Gerstenzang contributed to this story.