US starts Libyan Lockerbie payments

SHANNON, Ireland - The United States said yesterday it has begun transferring more than $500 million in Libyan compensation money to the families of American victims of the 1988 Pan Am 103 bombing over Lockerbie, Scotland.

More money is on the way to complete the settlement, but $504 million of $536 million to be distributed to the families was moved from the Treasury to a private account administered by Lockerbie families' lawyers on Friday, the top US diplomat for the Mideast said.

David Welch spoke to reporters aboard Secretary of State Condoleezza Rice's plane as she returned to Washington from the Middle East. He said he expected the rest of the Lockerbie payments would be made as soon as administrative details were worked out.

The cash comes from a $1.5 billion fund for US victims of Libyan-linked terrorism in the 1980s that Libya finished paying into last month.

In addition to paying compensation for the Lockerbie victims, the fund will distribute an additional $283 million to the victims and families of victims of a 1986 attack on a Berlin disco. The remainder will go to settle claims for other deaths, injuries and damage caused by Libyan agents.

The United States and Libya this year completed a comprehensive agreement, negotiated by Welch, to settle all terrorism-related claims from the 1980s.

Under the deal, $1.5 billion will go to American victims and their families. Some $300 million will go the Libyan victims and families of US airstrikes in Libya ordered in retaliation for the bombing of Berlin's La Belle disco in 1986.

All 269 passengers and crew, including 180 Americans, on the Pan Am flight and 11 people on the ground were killed in the Lockerbie bombing. Three people, including two American soldiers, were killed and 230 wounded in the Berlin disco attack. That attack prompted Reagan to order airstrikes on targets in Tripoli and Benghazi that Libyans say killed 41 people.

ASSOCIATED PRESS