Report: Gaddafi May Offer Lockerbie Compensation

By Mike Wendling | July 7, 2008 | 8:11 PM EDT

London ( - Libyan dictator Moammar Gaddafi is prepared to make an offer of $3.5 billion in compensation to the families of the victims of the Lockerbie bombing within a month, according to reports Tuesday.

Time magazine cited a leaked letter by lawyers conducting negotiations between the victims' families and Libyan authorities. The magazine reported that Libya is ready to make a "substantial formal offer."

Gaddafi has consistently denied that Libya was behind the attack, even though a former Libyan security agent was convicted of the bombing.

The mid-air explosion of Pan Am Flight 103 over Lockerbie, Scotland in 1988 killed 270 people.

Two Libyans were accused in the attack and one, Abdel Basset al-Megrahi, was convicted and sentenced to 20 years to life in prison by a special Scottish court sitting in the Netherlands. He is serving his sentence in a Glasgow prison cell dubbed the "Gaddafi Cafe."

Scottish judges turned down Al-Megrahi's final appeal in March, and the official investigation is over, paving the way for civil suits on both sides of the Atlantic. The United States and Britain have been involved in compensation talks with Libyan officials since the end of the initial trial last year.

U.S. officials have said that sanctions, including a ban on oil exports, will remain in place until Libya renounces all support for terrorism, acknowledges responsibility and pays compensation for the bombing and discloses information about Lockerbie and the bombing of a French airliner in Africa in 1989.

A spokesman for the British victims, Jim Swire, said Tuesday that Gaddafi may be seeking to cut a deal in an attempt to lift the U.N. sanctions.

"Clearly he is seeking to get out from under the cloud of Lockerbie by meeting the requirements imposed on his country by the United Nations," Swire told BBC radio. "We had no part in chasing the United Nations to call for compensation and we have had no part in these political discussions.

"The important thing is to keep this new political development in perspective," he said. "Our campaign has always been for truth about what happened and justice for our families."

The U.S.-based organization Victims of Pan Am 103 declined to comment on the Time report Tuesday. Glen Johnson, chairman of the organization, told in January that the victims had "mixed feelings" about a compensation deal with Libya.

A settlement might prevent additional information about Libya's role in the bombing from being released. On the other hand, Johnson said, a payoff by the Libyan government would greatly benefit the victims' relatives.

"Some of the families do need financial help," he said at the time.

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