NICOSIA, CYPRUS — An Iranian businessman abducted in a sting operation by American undercover customs agents 12 years ago has successfully sued the US government in a Tehran court, which last week awarded him half a billion dollars in damages.
Hossein Alikhani says his damages would have to be paid from US assets in Iran and could involve a claim against the sprawling American Embassy in Tehran.
A State Department spokesman in Washington said Friday that the US government "hasn't yet seen the judgment and [it] will need to be served through the normal diplomatic channels" before the US can comment. The US government declined to send lawyers or appoint local representatives to defend itself in Iran.
The two countries have not had diplomatic relations since 1980, when militant Islamic students seized the US Embassy in Tehran and held 52 American diplomats hostage for 444 days.
Alikhani's unprecedented legal challenge follows rulings by US courts to hold the Iranian government responsible for huge damages awarded to Americans held hostage by pro-Iranian groups in Lebanon during the 1980s.
Mr. Alikhani, a Cyprus-based businessman, maintains his legal action was motivated by principle.
"At some stage when ties are renewed, all this will have to be resolved, so I suggested Iran do cases so it could have files to match the US ones," says Alikhani, who has written two books about US sanctions against Iran and Libya. "I don't want to be a [monkey wrench] in relations between the two countries, but if Iran has to pay compensation, then so does the US."
Alikhani's attorney, Bruce Zagaris of Washington, predicts his client's victory could set a precedent for a flood of actions against the US government in Iranian and other foreign courts.
Victims of Iraqi chemical-weapons attacks, for example, could sue the US for supporting Iraq in the eight-year war against Iran in the 1980s.
But Jim Kriendler, a New York attorney who has represented US victims of the Pan Am 103 bombing over Lockerbie, Scotland, in suits against Libya, rejects such comparisons.
"It's not a question of doing the same thing," says Mr. Kriendler. "I've yet to hear anyone alleging the US backs groups murdering innocent victims."
A US law adopted in 1996 strips countries on the State Department's list of state sponsors of terrorism of their immunity from lawsuits in American courts for terror acts perpetrated against American citizens. Since then, American courts have awarded hundreds of millions of dollars in damages to victims of terror overseas in countries including Cuba, Israel, and Lebanon.
In the most recent case, a federal court in Florida last November awarded $318 million to the family of CIA agent William Buckley, who was kidnapped in Beirut in 1984 and later killed. And a trillion-dollar lawsuit filed last August by victims of the Sept. 11 terror attacks names the government of Sudan as one of several defendants.
Any claim Alikhani makes against the US embassy would also be in response to A US law passed last year that allows American citizens to make claims against the diplomatic assets of countries which the State Department deems to be sponsors of terrorism.
Gary Sick, an Iran expert at Columbia University, says the US made a mistake by allowing Americans to collect such large damages in these uncontested cases. "If we could play that game, others can play that game too," says Mr. Sick, who served at the National Security Council under three presidents. "They have people who feel they have grievances and it provides a way for them to go after us. It's a hopeless and endless process."
Sick says the Iranian court's judgment will only complicate matters when and if the two countries attempt to normalize relations.
Alikhani was seized in the Bahamas in 1992, accused of violating American sanctions against Libya, and held for more than four months. (See details below.) He was "kidnapped" because the sanctions did not apply to non-American citizens living outside the United States.
His case stirred controversy in the US itself at the time. Congress said it had been assured by the administration that seizing criminal suspects abroad without local co-operation would be reserved for extraordinary cases involving terrorists or international drug traffickers.
The Bahamian government also expressed its "utter disapproval" of the customs agents' actions, saying it had not been consulted or informed of the operation in advance.
Alikhani's action in Iran follows an unsuccessful attempt in a Florida court to sue the US Government for $360 million.
The prolonged case collapsed in 2001 when the court ruled that he had agreed as a condition of his release from prison not to sue the US authorities. His lawyers argue the condition was invalid, because Alikhani made it under the threat of an indefinitely long prison term.
Ironically, Alikhani is an advocate of improved relations between Tehran and Washington. He runs a nonprofit organization in Nicosia which organized a groundbreaking reconciliation meeting in Paris five years ago between one of the former Iranian students who seized the US embassy, Abbas Abdi, and one of the former US hostages, Barry Rosen.
Alikhani draws a distinction between his case and those of Westerners held in Lebanon by pro-Iranian groups. "My case is directly related to the US, but with the Lebanese hostages, there was no direct connection to Iran. They went for Iran, but they never sued the kidnappers, Hizbollah, or the Lebanese government."
Alikhani has a separate claim against the US government still pending before the Inter-American Commission on Human Rights.
• Staff writer Seth Stern contributed to this report from Boston.
Hossein Alikhani says his saga began in July 1990, when he faxed a request from his offices in Cyprus seeking to buy $1.6 million worth of spare parts for gas generators from a Florida company. He planned to ship the equipment through Germany to Libya for use in a government oil field.
The company replied the parts could not be supplied because of American sanctions against Libya, and Alikhani did not pursue the deal. However, the Florida company tipped off US Customs about his interest in shipping the equipment to Libya and agreed to set up a sting operation to collect evidence against him.
Ten months later, undercover customs agents, who had set up a fictitious company, contacted Alikhani to see if he was still interested in buying the parts.
Over the next few months, Alikhani's company bought some equipment which was shipped to Libya through Germany.
Alikhani says he was invited to the Bahamas to meet his "business partners" where the undercover agents invited him to board a private aircraft for a deep-sea fishing trip to another Bahamian island.
Thirteen minutes into the flight, the agents pulled out their badges, identifying themselves to the stunned businessman. He was arrested, transported to Florida and arraigned in West Palm Beach.
For the first 30 days, Alikhani was interrogated in a series of Florida hotels, where he says he was shackled to his bed at night, before being moved to a Miami prison where the inmates included Manuel Noriega, the former dictator of Panama.
He was asked to assist the authorities in identifying suspected US exporters of oil-field equipment to Libya, but says they were interested only in small trading companies, not multinational corporations or major US manufacturers.
Alikhani says the agents promised he could go home after he had cooperated. Instead, he was later indicted and jailed for violating the Libyan embargo. In February 1993, he pleaded guilty to conspiracy, was sentenced to time served and was released.
His lawyers argued Alikhani was not bound by the laws against Libyan trade, which apply only to US citizens. Also, they add, because he was arrested illegally, the federal court had no jurisdiction over his case and his plea deal was invalid.