Libya Is Off U.S. Terrorist List

After the mob attack on the U.S. embassy in 1979, U.S.-Libyan relations deteriorated further as the United States accused Libya of supporting several terrorist bombings. Most notable among these were the 1986 bombing of a discotheque in West Berlin frequented by American soldiers that killed three people, including two American service officers, and an explosion aboard Pan Am Flight 103 that brought the plane down over Lockerbie, Scotland, in 1988 -- killing 270 people, most of whom were American.

The Libyan government reached a settlement with the crash victims' families in 2002, to which the United States government was not a party, in which it agreed to pay $2.7 billion, or $10 million per family, in monetary compensation for the attack.

Of that settlement, $4 million was paid to each family after the United Nations removed sanctions on Libya, and an additional $4 million was paid to each after the United States removed additional sanctions. The remaining $2 million was to be paid when Washington removed Libya from its State Sponsor of Terrorism list. The timeline for this decision, however, expired in February 2005, and the money, which had been held in a Swiss escrow account, has since been removed.

The announcement on Libya was met with mixed emotions by the families of the crash victims.

Jim Kreindler, the attorney representing 130 of the 270 victims' families during negotiations with the Libyan government, spoke with many of the families today. He told ABC News that some were pleased that Libya had taken steps to reform itself and ensure that no more lives would be lost as a result of its actions. Others, he said, still maintained bitter feelings toward Libya and especially its leader, Moammar Ghadafi, saying that he should be imprisoned.

Now that Libya has been removed from the State Sponsor of Terrorism list, under the original agreement Libya is to pay the remaining $2 million to each family. It remains to be seen if this agreement will still be honored since the escrow account has expired.

"We have continually expressed to the Libyans that whenever the secretary of state offers findings that Libya will come off the list, that Libya should put the money back into the escrow account and then indicate that it'll abide by the agreement," Kreindler said.

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