U.S. Taxpayers to Pay Iran’s Compensation to Hostage Crisis Victims

The first released group of U.S. Embassy staffers in Tehran hold a press conference Nov. 18, 1979, the day after Ayatollah Khomeini ordered the release of all women and black U.S. hostages.

By Published on December 29, 2015

A fund of over $1 billion has been created for the U.S. embassy personnel taken hostage by Iran after the 1979 Islamic Revolution, but it is the U.S. taxpayer, not Iran, who will be paying for it.

The new fund, known as the “United States Victims of State Sponsors of Terrorism Fund,” was an addition to the omnibus bill put forward by Congress and signed into law by President Barack Obama Dec. 28. As much as $4.4 million could go to each of the 52 Americans held by Iran, with another $600,000 going to each spouse and child of the victims. The provision authorizes $1.025 billion from the Department of the Treasury to be used to pay for the new fund. Additionally, the legislation includes a 25 percent cap on any attorney’s fees, which could lead to as much as $250 million total going to lawyers of the various victims involved.

The victims were taken hostage during Iran’s Islamic Revolution led by former Supreme Leader Ayatollah Khomeini. Hundreds of student protesters stormed the U.S. embassy in Tehran taking 52 U.S. personnel hostage for 444 days. Several months after the takeover, former President Jimmy Carter authorized Operation Eagle Claw, a rescue attempt by U.S. special operations forces that would later fail. The hostages would eventually be released after a lengthy negotiation process the day of President Ronald Reagan’s inauguration in January 1981.

Victims of the embassy attack have been seeking compensation for their captivity for some time, but have been prevented from taking legal action against Iran. The 1981 Algiers Accords, the agreement which secured the release of the hostages, had a provision barring the victims from suing the Iranian government.

“Iran is not paying the money, but it’s as close as you can get,” says Thomas Lankford, an attorney for one of the victims, speaking to The Washington Post. Lankford refers to a clause in the new law which mandates that any money collected from the BNP Paribas scandal will be used for the new fund and the various 9/11 victim funds. The U.S. levied a fine of $9 billion on the French bank in June 2014 for its evasion of sanctions against countries like Iran, Cuba and North Korea.

The staggering amount of compensation being paid to the victims is remarkably higher than the $262,000 suggested by the George W. Bush administration in 2003. “Some may be surprised that a fiscally conservative, Republican-controlled Congress would authorize payments of more than $250 million from the U.S. Treasury to private attorneys, even on behalf of victims of terrorism deserving compensation,” writes attorney John Bellinger in the Lawfare blog.

The creation of the new fund comes on the heels of the Joint Comprehensive Plan of Action, also known as the Iran deal, agreed upon in July. As part of the agreement, Iran will receive as much as $100 billion in seized assets, none of which will go to the victims of the hostage crisis or their families.


Follow Russ Read on Twitter.


Copyright 2015 The Daily Caller News Foundation

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  • Dean Bruckner

    This is outrageous. Levy a special tax on the Obama’s, the Heinz Kerrys and the Clintons and let them pay exclusively for compensation.

  • retiredairforce

    Once again a country whose interests are inimical to those of the US is allowed to get away with murder with stressed taxpayers once again forced to pick up the tab for that country’s lawlessness.

  • dean

    And the Tea Party will only grow stronger…

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