A Special Investigative Report
from the Western Journalism Center
with the assistance of the Iran Brief
Editor’s note: The Clinton administration is hoping to conclude a
“package deal” with the government of Iran in time for the November
elections that would resolve 20 years of hostility between the United
States and Iran, lead to renewed diplomatic relations, and give
President Clinton a much-sought-after “legacy” in foreign affairs,
according to intermediaries directly involved in the negotiations and
former U.S. officials.
reported in WorldNetDaily the deal, if successful, would restore complete commercial ties between the two countries, allowing U.S. oil companies to invest in Iran and to buy Iranian crude oil while allowing President Clinton and Vice President Gore to claim credit for “resolving” the current oil crisis, all in time for the elections.
Today’s report documents how, in pursuing this mega-backroom deal, Clinton has become Iran’s best advocate in the United States, protecting Iran’s assets and shielding Iran’s leaders from prosecution — even at the expense of betraying the American family of a terrorism victim he once promised personally to help.
By Kenneth R. Timmerman
© 2000, Western Journalism Center
On April 9, 1995, a suicide bomber drove a van packed with explosives into an Israeli bus traveling from the Israeli coastal city of Ashkelon to a resort community in the Gaza Strip, killing 8 persons and wounding 50 more.
One of the victims was a 20-year-old junior from Brandeis University, Alisa Michelle Flatow, who hailed from West Orange, N.J.
Like many young Americans, Alisa Flatow was taking part of her junior year abroad. She telephoned her father, Stephen Flatow, shortly before boarding the #36 bus to Gaza, to ask whether he thought it would be safe for her to travel to a Jewish settlement that abutted Palestinian territories. After listening to her plans, he said he believed that the Israeli government would not provide civilian bus service unless it were safe to do so, and encouraged her to join her friends at the Gaza resort.
The bomb hit Alisa’s bus at 12:05 pm local time. Her father heard on the radio back in New Jersey a scant 30 minutes later that an Israeli bus had been attacked in Gaza, and immediately began trying to reach his daughter.
When the hospital where she was being treated for severe head injuries confirmed that was she one of the victims, he took the first plane to Israel. Stephen Flatow watched his daughter die at the Soroka Medical Center in Israel the next day.
Alisa’s murderer was a member of Palestinian Islamic Jihad-Shiqaqi faction, a terrorist organization that was funded and directed by the government of the Islamic Republic of Iran.
In a public statement issued hours after the bus bombing in Gaza, the Palestinian Islamic Jihad claimed responsibility for the killings. Ambassador Philip Wilcox, the State Department coordinator for counterterrorism, told Flatow in July 1996 that the government of Iran provided approximately $2 million annually to the PIJ in support of its terrorist activities.
In fact, independent Iran expert Patrick Clawson pointed out that the Iranian government had a line item in its publicly-approved budget that provided $100 million each year to a variety of terrorist organizations seeking to “liberate Palestine” and “struggle against Zionist occupation.” Among the groups were Palestinian Islamic Jihad, Hamas and the Lebanese Hezbollah group.
The Palestinian Islamic Jihad was led by a Gaza physician, Fathi al-Shiqaqi, whom the Israelis knew well. He was among a group of several hundred Palestinian activists expelled by the Israelis to the no-man’s land between the Israeli and Lebanese borders in 1984. Shiqaqi subsequently gravitated to South Florida, then disappeared.
In October 1993, an Arabic-language weekly published in London, Al Sharq al-Awsat, reported that Shiqaqi had met in Tehran with Ayatollah Ali Khamene’i, the supreme leader of the Islamic Republic of Iran, who promised to increase funding for his group if he would launch terrorist attacks against Israel.
Quoting “informed sources in Tehran,” the paper alleged that Ayatollah Khamene’i had “decided to personally take over responsibility for the issue,” and had urged Shiqaqi to launch a “violent struggle” against Israel with Iran’s support.
Israel has earned a reputation for refusing to take terrorist attacks against Jews lying down. After a PLO hit squad murdered Israeli athletes at the 1972 Munich Olympics, Israel’s intelligence service, Mossad, set up a special unit that tracked down the killers until every one of them had been found — and assassinated.
Six months after the fatal suicide attack against Alisa Flatow’s bus, a mysterious 43-year-old man carrying a Libyan passport in the name Ibrahim Shawesh was gunned down outside his hotel in Valetta, the capital of the Mediterranean island nation of Malta. Three days later, on Oct. 29, 1995, the Palestinian Islamic Jihad issued a statement in Gaza acknowledging that the victim was actually Fathi al-Shiqaqi, who had been traveling under an assumed identity.
Israeli Prime Minister Yitzhak Rabin could scarcely conceal his satisfaction when the news leaked out. Shiqaqi “was at the head of a murderous terror organization,” he told reporters, and “is not a man whose existence any civilized system could tolerate.” Rabin added: “He had many enemies, and if in fact he is the man who was killed, I certainly will not be sorry about it.”
But Iran’s rampage of terror did not stop at Shiqaqi’s death.
Early on the morning of Feb. 25, 1996, two American graduate students, 25-year-old Matthew Eisenfeld and 22-year-old Sarah Rachel Duker, boarded the #18 bus in Jerusalem, setting off for a day trip to visit the spectacular desert temples in Petra, Jordan.
Also on the bus was a young Palestinian, Majid Wardah, who was carrying a travel bag packed with explosives.
At approximately 6:45 am, the bus came to a stop on Yafo Street in Jerusalem and the explosives in Wardah’s bag went off, killing Sarah Duker, Matthew Eisenfeld, the young Palestinian and many Israelis on board.
The Palestinian group Hamas immediately claimed responsibility for the attack, which it said was aimed at sabotaging the Arab-Israeli peace process.
Hamas acknowledged in public statements that it received $15 million per month from the government of the Islamic Republic of Iran, money it used to support terrorist operations as well as social welfare activities in Gaza.
Wardah’s cousin, Mohammad Wardah, was subsequently arrested by PLO security officers in Gaza and condemned to a life sentence. In an interview with U.S. television reporters for CBS’ 60 Minutes, he bragged that he was responsible for enticing Majid Wardah to carry out the suicide bombing on the #18 bus.
“I took his pulse. I asked him how much he loved his land. How much he believed in paradise. His answers were positive. So I asked him whether he wanted to be involved in an operation,” Wardah said.
Hamas and PIJ carried out more suicide attacks as the Israeli elections approached, including a second strike against a #18 bus in Jerusalem on March 3, 1996 that killed 18 persons, and an attack in Tel Aviv the following day that killed 12 and wounded 105 others. Altogether, some 57 persons were murdered in the suicide attacks that spring.
An official statement carried by Iran’s state-run news agency on March 4, 1996, called the blasts divine retribution.
“Israel, the only state in the world to be created by terrorism and brutal use of force, is now tasting its own medicine. The divine retribution on those who spread corruption and injustice on the earth will be severe,” the statement read.
The IRNA comment, and other statements in support of the bombings from Iranian government officials and leading clerics, prompted Israeli Prime Minister Shimon Peres to accuse Iran of seeking to sabotage Israel’s elections.
In an oft-quoted speech at the anti-terrorism conference at the Egyptian resort of Sharm el Sheikh on March 13, 1996, Peres said: “This terrorism is not anonymous. It has a name, it has an address. It has a bank account, it has an infrastructure, it has networks camouflaged as charity organizations. It is spearheaded by a country — Iran.”
After the elections, which Peres lost to Likud leader Benjamin Netanyahu, the Israeli security forces arrested a Palestinian named Hassan Salameh, who confessed to being the mastermind behind the March 1996 series of suicide bombings.
In an interview with 60 Minutes, portions of which aired on Oct. 5, 1997, Salameh described how after joining Hamas he went to Sudan for indoctrination, then to Syria, where he met Iranian handlers who flew him to an Iranian airbase near Tehran for special training in intelligence methods and the use of explosives.
Following his training, he was sent back to Gaza with orders from Iran to carry out a series of suicide bombings in Israel.
Striking back in the courts
That second wave of terrorist bombings in Israel, where other young Americans like his daughter were killed, sparked Stephen Flatow into action.
No longer alone in his grief, Flatow contacted his representatives in Congress, Democratic Sen. Frank Lautenberg and Republican Rep. Jim Saxton. As evidence of Iran’s involvement in the attacks began to emerge, they helped push through an amendment to the 1996 Antiterrorism and Effective Death Penalty Act, which allowed victims of state-sponsored terrorist acts to seek redress in U.S. courts.
The new measure lifted the immunity of foreign governments proven to be state sponsors of terrorist acts that killed Americans. It allowed families of the victims to sue them in U.S. courts and to attach their assets in compensation. Not only were the recent attacks fresh in everyone’s mind, but it was an election year. The bill passed without a hitch in April 1996 and was signed into law by President Clinton.
Not long after the signing, Clinton appeared in public with Flatow at a fund-raiser at the Plaza Hotel in New York. Flatow still recalls Clinton’s body language, which oozed sympathy and support.
“I got the right hand in a handshake, with the left hand at shoulder level on my arm. I figured that was pretty good,” Flatow recalls. “I had the distinct impression that I had the full weight of the United States behind me.”
Armed with Public Law 104-132 and Clinton’s personal benediction, the Flatow family filed suit in U.S. District court in Washington, D.C., against the Islamic Republic of Iran.
At first, they received excellent cooperation from the administration. On June 8, 1997, the State Department agreed to serve process on the Iranian government through the Swiss embassy in Tehran, which has represented U.S. interests in Iran since the hostage crisis.
By all accounts, the administration was expecting the Iranians to respond. But when three months went by without a word from Tehran, District Court Judge Royce C. Lamberth entered a default judgement against the Iranian government.
On March 11, 1998, he condemned the Iranian government to pay the Flatows $247.5 million in penalties and damages. It was the largest damage award against a foreign government in history.
Stephen Flatow remembers that he was floored.
“In 1996, when we started, we thought it would take anywhere from seven to ten years to get through the courts,” he said in an interview. “Instead, the Iranians defaulted. It surprised the hell out of the United States, and it surprised the hell out of us.”
Flatow even began planning how he could use the money to set up charities to sponsor young people wanting to study in Israel, his fondest dream.
Not really knowing where to begin in collecting on the settlement, Flatow and his lawyers asked Lautenberg to write a letter to the State Department on April 24, 1998, requesting assistance in locating Iranian government assets in the United States. The June 10, 1998, reply they received from Assistant Secretary of State Barbara Larkin was baffling. But they had not counted on the duplicity of Bill Clinton.
“[T]here are currently no Iranian assets held by or under the control of the United States Government which could be used to pay claims against Iran,” Larkin wrote. “Frozen Iranian assets in the United States, with the exception of a small amount of assets that are at issue in arbitration before the Iran-U.S. Claims Tribunal, were released at the time the hostages were freed in 1981, pursuant to the Algiers Accords.”
As Flatow and his attorneys would learn subsequently, this was simply not true. Larkin went on to note that the Iranian government was expressing second thoughts about its refusal to take part in the court proceedings.
“The Iranian Government’s Agent to the Iran-U.S. Claims Tribunal in The Hague recently approached the United States to ask about the status of the Flatow litigation, and Iran’s options,” she wrote. “We informed Iran … that the United States cannot represent a foreign government in U.S. courts and that Iran should obtain counsel and enter an appearance in the case.”
Contrary to Larkin’s written statement, however, the Clinton administration began to represent the Iranian government before Judge Lamberth’s court, in an increasingly brazen and inexplicable manner.
On June 26, 1998, the Justice Department appeared in Judge Lamberth’s court to oppose subpoenas from the Flatow family lawyers to the Treasury and State Departments, seeking information on Iranian diplomatic properties in the United States. Under the Shah, Iran’s embassy parties in Washington were legendary.
Following the break in diplomatic relations in 1980, the ambassador’s mansion on Massachusetts Avenue as well as several consular properties in Bethesda, Md., were rented out by the State Department, with the proceeds going into a blocked account with the Nations Bank in Washington, D.C. Justice Department lawyers objected when the Flatow lawyers sought information on how much money was in that account.
Ten days later, Judge Lamberth attached those properties and instructed the U.S. Marshall to notify the occupants that ownership was being transferred to the Flatow family as a result of the court’s decision. But before the U.S. Marshall could execute the order, the State Department legal adviser ordered him by phone not to serve the writ of attachment, claiming the properties were on an “exempt list” kept secret by the Department of State.
“This is when the government began to defend the Islamic Republic,” says Flatow family attorney Thomas Fortune Fay. “We were naive. We thought they might avoid a question or two, but not that they would lie. We were wrong.”
At the next court hearing, in early July 1998, the Justice Department showed up with 14 lawyers.
“They filled up one whole side of the courtroom,” Fay recalls. “Clearly, protecting the assets of the government of the Islamic Republic of Iran had become more important to the administration than defending the rights of American citizens to justice.”
On July 28, Justice Department attorney Jay Bhambhani cried foul: “Your unfounded accusation that we are lying to protect the assets of a terrorist government is far from [the truth] … We are trying to protect U.S. national interests … including U.S. treaty obligations” and U.S. foreign policy interests, he said.
The legal wrangling had just begun. In court hearings and in negotiating sessions at the State Department, Treasury and Justice, the Flatow attorneys pressed the administration to produce documents that would help them identify Iranian assets in the United States. After all, that is what the president had promised Stephen Flatow during the 1996 election campaign.
Eventually, the Flatows went back to Congress, and in October 1998 got an amendment added to the appropriations bill that required the State Department and the Treasury to assist in locating the assets of foreign nations found guilty of state-sponsored terrorist acts that killed Americans.
To ensure passage, they included standard language allowing the president to waive the requirements of the bill “in the interest of national security.”
In an extraordinary move, Clinton exercised that waiver on Oct. 21, 1998, in Presidential
Determination No. 99-1, “Determination to Waive Requirements Related to Blocked Property of Terrorist-List States.”
In that document, President Clinton acknowledged for the first time in writing that his administration was engaged in a secret diplomatic overture to the Islamic Republic of Iran, which required him to protect Iran’s assets in the United States.
It was a stunning admission, which until now has gone virtually unnoticed in the press.
Next: Iran claims the U.S. is sitting on $20 billion of its money, and it wants that money back. While surely an exaggeration, the Iranian government has extensive financial and real estate holdings in the United States, which have become the subject of intense political wrangling.
Clinton, Iran plan election-eve
Secret spy deal: U.S., Iran, Israel.
Clinton sought dirt on W’s dad.
The Western Journalism Center is a non-profit, tax-exempt organization that sponsors independent investigative reporting projects into government fraud, waste, corruption and abuse. The charity was founded by Joseph Farah, now editor and chief executive officer of WorldNetDaily.com, but is an entirely autonomous company.
If you would like to support more journalism like Kenneth Timmerman’s “October Surprise” series with tax-deductible contributions, you can do so by calling 1-800-952-5595, by writing to the center at P.O. Box 2450, Fair Oaks, CA 95628, or by making your donation
Kenneth R. Timmerman is a veteran investigative reporter who has published three books on the arms trade and intelligence issues.