U.S. Must Hold Funds for Ex-POWs

A federal judge ordered the government to retain more than $650 million from assets taken from the Iraqi government to guarantee compensation for 17 American former POWs tortured by their Iraqi captors during the 1991 Persian Gulf War.

A Treasury Department spokesman said Saturday that the order, restricting almost half the roughly $1.4 billion in Iraqi money still held in a New York account, will have no effect on transfers to Baghdad already earmarked as operating expenses for the emerging Iraqi government.

Judge Richard W. Roberts of the U.S. District Court for the District of Columbia issued the temporary restraining order late Friday after hearing arguments from attorneys for the former prisoners of war and the government.

The order is to continue for 10 days as the two sides present additional briefs.

It ordered Treasury Secretary John W. Snow not to transfer to the Iraqi reconstruction effort “any amount of Iraqi assets that have been confiscated or vested by the United States” that would reduce to less than $653.07 million the amount held in a special account at the Federal Reserve Bank of New York.

The account represents what remains of $1.7 billion frozen in 1990, after then-President Saddam Hussein sent his troops into neighboring Kuwait, triggering the Gulf War the next year. Under provisions of the anti-terrorism USA Patriot Act, the Bush administration this year seized title to the money March 20 as U.S. troops invaded Iraq and eventually toppled the Hussein government.

The New York account specifies the money should be used for the Iraqi people.

The 17 former prisoners sued Hussein, the Iraqi state and its Mukhabarat intelligence service in April 2002. Roberts found in their favor two weeks ago and ordered payment of about $653 million in compensatory damages and $306 million in punitive damages. His restraining order covered the money awarded as compensation.

The administration says the money is too vital for restoring normalcy to Iraq to be diverted.