Libya Denies Lockerbie Offer Was Made

Libya's United Nations mission said Thursday "the Libyan state has no relationship" with an agreement under which that country reportedly promised $2.7 billion in compensation to the families of Pan Am 103 victims.

But a lawyer for the U.S. team that represents families said he has no doubt that the Libyan negotiators were authorized to settle the lawsuit the U.S. side presented on behalf of the families.

In a three-paragraph statement, the Libyan U.N. mission said the responsibility of the Libyan state in the case ended years ago.

"It has no relation to any agreement in which it is not a party," the statement said.

The New York law firm of Kreindler & Kreindler announced Tuesday that Libya had agreed to pay $10 million to families of each of the 270 victims of the 1988 Pan Am 103 bombing.

The U.N. Security Council has made a series of demands, including compensation, in return for the lifting of U.N. sanctions against Libya.

James Kreindler, part of the team that has been negotiating with the Libyans for 10 months, said the statement by the Libyan mission reflects peculiarities of the Libyan system.

He said he is optimistic that Libya will meet all U.N. Security Council demands. Besides compensation, Libya must accept responsibility for the bombing, renounce terrorism and fully disclose all it knows about the bombing.

"It is inconceivable that Libya would be willing to pay $2.7 billion if it was unwilling to do these other things," Kreindler said.

Under the agreement, the money would be placed in escrow and released piecemeal as the sanctions against Libya are revoked: 40 percent when U.N. sanctions were lifted, 40 percent with removal of U.S. commercial sanctions and 20 percent when Libya is removed from the State Department's list of sponsors of international terrorism.

Kreindler said he believes the families could receive the first 40 percent as early as this summer, assuming Libya takes the steps demanded by the U.N. Security Council.

Analysts say Libya considers compensation necessary before it can be welcomed back into the international community and start to repair ties with Washington.

Secretary of State Colin Powell cautioned that no official offer is on the table.

"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 respect to Libya and Pan Am 103," he said.

As word came that a settlement might be near, Victoria Cummock, whose husband was killed in the bombing of Pan Am 103, said Libya's reported offer to settle a lawsuit filed against the country's government was an outrage.

"For us to accept $10 million when there's a mass murder that took place and no admission of guilt is given, you're saying you can kill as many Americans as you want and we'll look the other way," Cummock said.

Many relatives of those killed when a bomb exploded aboard the airliner in December 1988 were similarly enraged when they heard of the preliminary $2.7 billion settlement offer, while emotions in others ranged from skepticism to grudging acceptance.

Some said the purported offer was politically motivated by Libya's efforts to get U.S. sanctions lifted.

"It's a business deal, not a compensation offer. It's contingent on how much Libya has to gain from the United States by the lifting of the sanctions," Daniel Cohen of Cape May Court House, N.J., said Wednesday. "It puts us in the position of being cheerleaders for (Moammar) Gadhafi."

Kreindler declined comment when asked the fees his firm is charging in the case except to say that it is far less than one-third of the total.