U.S. Privately Hints at Easing Hostage Stand

A Tehran newspaper called on the Bush Administration on Tuesday to release frozen Iranian assets in the United States, suggesting that in return Iran would help to free U.S. hostages now being held by Islamic militants in Lebanon.

The overture brought a quick rebuff from the White House, which reiterated its policy against making deals with terrorists to win hostages’ freedom.

However, Administration sources said privately that the United States eventually might be willing to reconsider its hard-line stand on the impounded assets under some circumstances. A less rigid posture might be possible, they suggested, if all the U.S. hostages in Lebanon were freed first and Iran took further steps to improve its relations with the West.

No Official Proposal

The Iranian funds and other material were frozen in 1979 after the seizure of the U.S. Embassy in Tehran. U.S. officials stressed that any reconsideration of the assets now would be premature because Iran has not officially made a proposal.

Also, should there be any future reconsideration of the Iranian assets, they stressed, it would not come in the form of a direct exchange or deal for the hostages’ freedom.

The indirect overture raised an issue that the Administration has feared it would face as it continues to press Iran to use its influence over Lebanese Shiite groups to release the eight Americans they are holding. Iran has long demanded the return of the assets as its price for improved relations with the United States.

Tuesday’s message appeared in the Tehran Times and in a report distributed by the Islamic Republic News Agency.

Quoting what it described as a source close to President Hashemi Rafsanjani, the account said: “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 bank accounts as well as arms purchased by the late Shah Mohammed Reza Pahlavi but not delivered, have been valued in disparate estimates ranging from $2 billion to $12 billion.

At the daily White House press briefing, presidential spokesman Marlin Fitzwater said, “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. 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.”

State Department spokesman Richard Boucher said the Iranian assets issue will be resolved by a special Iran-U.S. tribunal at The Hague 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.

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

Might Expedite Negotiations

However, Administration sources said privately that it is possible that, in the aftermath of a release of all eight hostages, the United States might expedite the negotiations over the frozen funds.

Such steps would not be comparable to the Reagan Administration’s ill-fated efforts in 1985 and 1986 to trade arms to Iran for the release of hostages, they stressed. Rather, they would be in the spirit of President Bush’s remarks about U.S.-Iranian relations in his inaugural address, that “Good will begets good will.”

In his briefing, 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.

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 Bush “as he tries to save the living and end the suffering.”

She said the Marine Corps commandant had told her that it was virtually certain that Higgins, a Marine lieutenant colonel seized in February, 1988, while serving with the U.N. observer force, 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.’ “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.