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Lingering Questions About Libya

CBS News Foreign Affairs Analyst Pamela Falk teaches international law and is a victims compensation expert.

Fifteen years after PanAm Flight 103 was bombed over Lockerbie, Scotland, Libya's leader, Col. Moammar Gadhafi, has admitted responsibility for the terror attack and agreed to pay $2.7 billion to the heirs of the 270 passengers. Under pressure from the French who had settled a similar claim for substantially less, the final agreement included additional compensation to victims aboard a French airline, UTA, bombed by Libya the year after the PanAm attack.

On Friday morning, the vote is scheduled to take place to lift the United Nations sanctions against Libya. "The sanctions required Libya to admit responsibility and to prosecute those involved," said Ambassador Diego Arrias, who was Venezuela's U.N. Ambassador and President of the Security Council when the sanctions were imposed. The day after the sanctions were imposed, the Venezuelan Embassy in Tripoli was burned and looted. But times have changed and "the Libyans have met the U.N. requirements," said Arrias.

The agreement settles one chapter in the tragic war against terror by providing meaningful compensation for victims of state-sponsored terrorism. But, the question remains as to whether the Libyan leader has sworn off terror as a weapon against the West.

"We forced a settlement because our lawsuit was at the crossroads of U.S. - Libya relations," said James P. Kreindler, lawyer for the PanAm victims' families. One week after the vote, the first payment of the money that is already in the escrow account at the Bank for International Settlements in Switzerland will be transferred to lawyers who will distribute it to the families, Kreinder said.

Has the leopard changed his spots? Gadhafi, announcing the framework of a final agreement on the 34th anniversary of the coup that began his rule, told Libyan television that his admission of guilt and the compensation to victims represented a reopening of relations with the international community. "We are opening a new page in our relations with the West," Gadhafi told the Libyan public from Tripoli on national television last week.

In Paris, the French Foreign Ministry told CBS News that their view is that Gadhafi has changed and is no longer involved in terrorism. The U.S. State Department, prepared to lift the United Nations sanctions as a first step, is not so sure.

In a mid-August press briefing, a senior State Department spokesman said, "This is about Libya getting out of the terrorism business, nothing more, nothing less." And Secretary of State Colin Powell said in early September that the United States will maintain its sanctions and Libya will remain on the terrorism list, which carries additional economic penalties.

Some of the relatives of the victims of the PanAm bombing are also skeptical. Dan and Susan Cohen, whose daughter Theodora, a Syracuse drama student returning from a semester abroad, was killed in the attack told CBS News "The Libyan acceptance of responsibility certainly does not close the PanAm 103 case. Indeed the State Department has assured us that the investigation is still open …"

The dictator's history does not portray Gadhafi as a Dickensian Scrooge capable of awakening a new man of new moral sensibilities. Has he succumbed to fear of a U.S. invasion to avoid a fate like Saddam Hussein? Is there a true realignment of the region that Gadhafi wants to be a part of? Did the pressure of international sanctions and economic denial of arms sales, air routes and trade, coupled with a massive tort judgment courtesy of U.S. personal injury lawyers force the change?

To begin with, U.S. C.I.A. reports still maintain that Gadhafi still has unconventional weapons which could be used for chemical weapons and has most recently been meddling in the politics of African neighbors, supporting the ousted Charles Taylor. Libya's one known nuclear research reactor is under international safeguards.

In mid-August, the deal announced by lawyers for the families of the PanAm victims and signed by the Libyan government on August 13, setting up a $2.7 billion fund for families of the 270 victims, or $10 million per family in an escrow account at the Bank for International Settlements in Switzerland.

Under the terms of the agreement to lift the sanctions, the Libyan government was required to write a letter taking responsibility for the bombing, renouncing terrorism and paying compensation to the families, which it did. The compensation deal calls for Libya to pay each victim's family $4 million when U.N. sanctions against Libya are lifted, another $4 million when the United States lifts its own sanctions against the country, and $2 million when Libya is removed from the State Department's list of countries sponsoring terrorism. The first $4 million will be paid into a New York trust account out of which will be taken lawyers fees.

Do the families now want the U.S. sanctions to be lifted and Libya taken off the terrorist list? "With only a few exceptions, the view of the families is that if Libya does what the U.S. wants, for example, with Weapons of Mass Destruction, then it is appropriate to lift commercial sanctions," Kreinder said. "You can see sanctions as revenge or as a carrot and stick to change behavior. The Libya case can be a paradigm for Syria, North Korea, and other terrorist countries and has tremendous implications for making terrorists change."

For months, the compensation was delayed when France threatened to block the lifting of the U.N. sanctions. France threatened to veto the resolution, proposed by Britain, abolishing the trade sanctions unless Tripoli conceded to pay a similar level of compensation to the families of the 170 victims of the UTA bombing, also blamed on Libya. In 1999, Libya paid $33 million to families of the 170 people killed in the 1989 bombing of the French passenger jet over Niger. In 1999, six Libyans were convicted, in absentia, by a French court for the bombing the UTA flight and sentenced to life in prison. "There are international warrants out for the arrest of the six" the French foreign ministry said," and their extradition is not a French condition for the approval of the U.N. vote.

Gadhafi announced on state television last week that an agreement had been reached following weekend negotiations in Tripoli based on meetings with the relatives of the UTA bombing on their second trip to Libya after an earlier attempt to strike an improved deal failed: "We can say that the UTA affair and the Lockerbie affair are now behind us and that we are turning a page with France and the United States."

The French compensation will not be the same amount but an increase was important to the victims of the UTA attack. The Security Council resolution passed in 1992 banned arms sales and air links to Libya to force Libya to extradite two Libyans indicted for the bombing; when the men were handed over for trial in April 1999, the council suspended sanctions indefinitely - but they were never lifted formally.

Marie Masdupuy, Deputy Director of the press office for the French government told me in an interview at Quai d'Orsay, the French Foreign Ministry, that France's President Jacques Chirac intervened on the French victims behalf.

Diplomatically, the agreement is a sign of some level of cooperation between the U.S., British and French negotiators for UN cooperation. Masdupuy said that the meetings between Secretary of State Colin Powell and French Foreign Minister Dominique Villepan showed a patience and consideration for the French victims which may bode well for a resolution of the negotiation on a United Nations' resolution on Iraq and, ultimately, is a limited but positive success for international cooperation in the battle against terror.

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