Iran terror victims to get $9.4M via San Diego case

It was 25 years ago that Iranian agents snuck into the Paris home of former Iranian prime minister Dr. Shapoir Bakhtiar, murdering and mutilating him with a kitchen knife. The exiled politician had been a strong opposition voice against Iran’s Islamic regime.

And in 1997, three Iran-backed Hamas suicide bombers blew themselves up in the middle of a Jerusalem pedestrian mall, killing five bystanders, including three 14-year-old girls shopping for school supplies, and wounding several others.

After decades of legal battles, the 9th U.S. Circuit Court of Appeals has ruled that it’s time for Iran to pay — literally.

The appeals court has made it possible for 10 American victims of the brutal attacks and their families to collect more than $9.4 million in Iranian funds. The Feb. 26 opinion confirms a ruling two years ago in the lower district court in San Diego.

“This is the first real opportunity we really feel we are actually going to collect something and force Iran to pay back some kind of compensation,” said Daniel Miller, who was peppered with shrapnel in the Jerusalem bombing. “They shouldn’t go unpunished.”

The award isn’t coming directly from Iran. Rather it is money that San Diego-based defense contractor Cubic owed to Iran after a business deal in the 1970s went bad because of rising political tensions between the nations.

The deal in 1977 was for Cubic to sell Iran an air combat maneuvering range system for $17 million, plus a separate contract for Cubic to maintain the system. A year later, Iran had paid $12 million of the purchase price and some of the service contract, and by 1979 Cubic was ready to transfer the equipment to Iran.

Then the Iranian revolution changed everything. Iran’s U.S.-supported dynasty was overthrown and Islamic rule took hold. And on Nov. 4, 1979, the Iranian hostage crisis kicked off 444 days of tense political maneuverings between the U.S. and new Iranian rulers.

The Cubic deal was done for, and an agreement was made for Cubic to sell the equipment instead to another country. In 1982, Cubic sold the system to Canada, ignoring Iran’s call for reimbursement.

Iran asked for the dispute to be arbitrated by the International Chamber of Commerce in 1991, and in 1997 the international body found that Cubic indeed owed Iran $2.8 million plus interest and costs.

In 1998, Iran asked the San Diego federal court to confirm the award, and the court agreed. After appeals, Cubic placed the funds with the court — with interest and costs, more than $9.4 million in all — and there the money has sat, considered a blocked or frozen asset under U.S. law.

Meanwhile, victims of the Paris and Jerusalem attacks have been fighting their own cases against Iran. Foreign countries are typically protected by sovereign immunity, but there is an exception when it comes to state-sponsored terrorism.

In 2001, former prime minister Bakhtiar’s daughter, France Rafii, a U.S. citizen who lives in Virginia, sued Iran. Iran didn’t appear, and after a two-day trial the judge entered a default judgment against Iran for $5 million in compensatory damages.

Nine American suicide bombing victims and their families also brought their own lawsuit in Washington D.C. in 2001, and again Iran ignored it. A judge ruled after a four-day trial that Iran trained and provided other assistance to the bombers, and handed down an award of $70 million in compensatory damages.

“Iran’s demonstrated policy of encouraging, supporting and directing a campaign of deadly terrorism is evidence of the monstrous character of the bombing that inflicted maximum pain and suffering on innocent people,” the district court said in its ruling. “Killing innocent civilians for political ends constitutes unconscionable conduct in any civilized society.”

But the way U.S. law was written at the time, the victims could not collect. That changed in 2002 with the Terrorism Risk Insurance Act, allowing the blocked assets of a country to be made available for judgments in terrorism incidents.

That meant the Cubic money was free to go to the terror victims rather than Iran.

The Cubic money does not make up all of the award owed to the victims, but Miller said it was still a tremendous victory.

Miller, an American, was 18 and had just arrived in Jerusalem to begin a year of studying abroad when he found himself in the blast zone. He was sitting at a cafe table on Ben Yehuda Street with two friends when the first bomber detonated his deadly vest at the ATM next door.

Miller was thrown back by the explosion, confused. “I faced forward, locked eyes with another person who said ‘Allahu Akbar’ and blew himself up in front of me,” Miller, 37, who is in the medical supply business, said in an interview from his Miami home. “He was the second bomber.”

A third bomber detonated up the street. They had been carrying briefcases packed with nails, screws and other bits of metal and glass.

Miller’s hair was scorched, a 6-inch nail lodged in his right calf, two bolts were in his ankles, shrapnel in his arm and glass in his eye. He took months to recover and still suffers from nerve and tendon damage.

“One of my biggest challenges after the attack was what do I do to counter this evil? I had no way to really go after the people responsible.”

For years the lawsuit seemed merely a symbolic gesture, until now.

“I know in my heart you can’t fight the war on terrorism just militarily. ... You have to fight terrorism on every front — technologically, militarily and financially,” he said. “If you go after the money and show them their money is not safe, maybe they will hesitate next time and maybe save a life.”

David Strachman, a Rhode Island-based attorney who tried the Jerusalem case alongside the Israel Law Center, called the ruling “extremely unusual” for the large assets involved.

“Iran fiercely fought this,” Strachman said, noting the several appeals the case has had. “They tried to thwart the victims at every attempt.”

The Pasadena-based attorney representing Iran, Steven Kerekes, declined to be interviewed. Iran is considering appealing to the U.S. Supreme Court.

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