by Mike Kelly
After the meeting between Gore and Lautenberg, Clinton wrote to Lautenberg, stating his desire to assist the Flatow family in obtaining justice. But Clinton was not specific.The president had not promised to release the Iranian assets that Flatow wanted. Nor had Clinton’s Treasury Department bothered to answer Lautenberg’s letter asking for help.
Lautenberg was frustrated. Since meeting Gore, he had decided to take a tougher stance with the White House on the Flatow issue. Lautenberg did not want to unnecessarily pressure the president because he knew Clinton was facing increased criticism from Republicans over revelations of his sexual affair with White House intern Monica Lewinsky. And while other Democrats, especially those in the Senate and House were trying to build a wall of unified support for Clinton amid the growing political maelstrom surrounding the Lewinsky controversy, Lautenberg knew that even the smallest criticism from him would not be taken well.
He didn’t care. Throughout the spring of 1998, Lautenberg and his staff had grown frustrated with the foot-dragging and mixed messages from the White House and throughout the Clinton administration. Why would the president sign a bill in 1996 allowing US citizens to file lawsuits against terrorist nations and two years later try to hinder one of the most passionate and articulate of those citizens from trying to collect financial damages? Lautenberg considered himself a loyal Democrat. But he considered Stephen Flatow a victim who also was his constituent in New Jersey. Lautenberg had achieved great wealth in private business as the owner of a data processing firm, yet he often approached difficult issues such as this with the basic values and street smarts that he learned while growing up during the Great Depression in Paterson, New Jersey, tenements. To Lautenberg, White House behavior on the Flatow matter made little sense. Even worse, he believed it was fundamentally unjust.
The day before Lamberth ordered a temporary halt to Flatow’s efforts to retrieve financial penalties from Iran, Lautenberg sat down with one of President Clinton’s closest aides, Sandy Berger. Samuel Richard “Sandy” Berger had known Bill Clinton since 1972, when the two met as operatives on the ill-fated Democratic presidential campaign of George McGovern to unseat incumbent Republican Richard Nixon. Berger, now fifty-two, had become a foreign policy expert within the Clinton administration. During Clinton’s first term, he served as a deputy national security advisor. Now, in Clinton’s second term, Berger had been promoted to the president’s top national security advisor.
After reminding Berger that Clinton had ordered the Treasury Department to release frozen Cuban assets to each of the families of the Brothers to the Rescue pilots, Lautenberg proposed a solution. If the president does not feel he has the specific authority to grant permission for Flatow to claim some portion of Iranian assets in the United States, Lautenberg could draft generalized legislation that would give the president the power to remove government protections from blocked or “frozen” assets of countries designated as state sponsors of terrorism, but only to make them available to US citizens who had been victimized by terrorism. As part of a memorandum to help Lautenberg prepare for the meeting with Berger, the senator’s staff wrote, “if the United States government can come to the aid of the American families of Cuban-American victims who were killed by the military and not killed in a terrorist attack, it should come to the aid of an American family of the innocent victim of an Iranian terrorist attack.”
The memo concluded with a suggestion that Lautenberg wanted to stress to Berger: “I really am hoping that the Administration can be more responsive. This is very important to me. If the President lacks authority to release these funds, then I’d like to have your support if I seek to give him that authority.”
Nine days later, Lautenberg met again with Sandy Berger at the White House. This time, he brought Stephen Flatow and Steve Perles. The meeting lasted only thirty minutes, and, to Flatow, Lautenberg seemed frustrated.
Lautenberg again mentioned what he felt was the discrepancy in how the Cuban-American families of the pilots had been compensated with previously frozen Cuban assets while Flatow had been blocked from putting a claim on Iranian properties in the United States or frozen Iranian bank accounts. Lautenberg also explained that two days earlier he had proposed an amendment to the annual Treasury appropriations bill that would give families of terrorist victims the right to seize blocked assets of state sponsors of terrorism. But Lautenberg’s amendment contained a loophole that gave the president the right to decline to release frozen assets if he felt America’s national security might be placed in jeopardy. As with his previous meeting with Berger, Lautenberg had asked his senate staff to prepare a memo containing proposed “talking points.” Like the memo Lautenberg’s staff assembled for that first meeting, the memo for the second meeting with Berger concluded ominously: “I hope that the administration will not allow this issue to become a political tool for the Republicans.”
Within the tight-knit world of the Clinton administration, where politics was inevitably part of almost every discussion about policy, it became the job of Stuart Eizenstat to negotiate a solution that would satisfy Flatow’s desire to hold Iran accountable, yet not create a legal and diplomatic precedent that would derail America’s ability to conduct foreign affairs. To be sure, it was a delicate strategy. Eizenstat had to deter Flatow without making it seem that the Clinton administration was opposing Flatow’s efforts to hold terrorists accountable for murdering his daughter. The political stakes were enormous and potentially embarrassing for the White House.
By the summer of 1998, as the legal and political ramifications of Lamberth’s ruling rippled through the White House, Congress, and throughout the sprawling federal bureaucracy, Eizenstat held the title of Under Secretary of State for Economic, Business and Agricultural Affairs. But his reputation for tackling some of the federal government’s thorniest problems and navigating Washington’s political tempests extended far beyond his work at the State Department.
Raised in Atlanta, where he was educated in the city’s public schools, Eizenstat went on to the University of North Carolina and then earned a law degree from Harvard University. After finishing law school and a clerkship for a federal judge, Eizenstat headed for Washington where he landed a job as a research director for Vice President Hubert Humphrey. He quickly moved into the White House as part of President Lyndon Johnson’s staff where he became known for his meticulous analysis of complicated political and policy issues—and, perhaps most notably, his ability to foresee future problems from a variety of perspectives.
By the mid-1970s, Eizenstat, still in his early thirties, had caught the attention of a fellow Georgian with presidential aspirations, Governor Jimmy Carter. As Carter formally launched his presidential campaign, he looked to Eizenstat to become the policy director. After Carter’s victory in 1976 over incumbent president Gerald Ford, Eizenstat served four years as the White House chief domestic policy advisor. It was a difficult and unpredictable time for anyone to take on that job, but Eizenstat gained respect for his insight and thoroughness, especially his analysis of how the nation’s economic downturn affected women. He was one of the first government officials to draw attention to what he described as the “feminization of poverty.”
By the 1990s, Eizenstat had turned his focus to international issues. For him, it was the kind of switch that underscored his ability to quickly gain expertise—and respect—in a variety of subjects. Called back to government service with the election of Bill Clinton, Eizenstat became adept at handling trade agreements, climate change debates and even negotiations for reparations on behalf of Holocaust victims.
During the first three years of Clinton’s presidency, Eizenstat served as the US ambassador to the European Union. In 1996, he returned to Washington as Under Secretary of Commerce for International Trade and moved a year later to his post at the State Department, specializing in US sanctions against foreign governments and the worldwide impact of American economic policy. Beginning wit
h his job as the American ambassador to the European Union, Eizenstat found himself in the middle of a fifty-year-old question that no other American official, or international figure, had been able to resolve: how to justly compensate victims of the Nazi Holocaust.
Eizenstat came to refer to the lingering Holocaust issue as “the unfinished business of the twentieth century.” He had lost relatives in the Holocaust, so he had a personal link to the issue. But as he had done with other policy issues earlier in his career, Eizenstat set aside his personal passion and approached the problem with a researcher’s meticulousness. He assembled a vast amount of information that not only defined the size and depth of the problem but helped point him toward a wide-ranging series of settlements to help compensate victims.
Eizenstat discovered, for instance, long-dormant Swiss bank accounts of Jews who had been murdered by the Nazis. He tracked down millions of dollars worth of property that had been wrongly confiscated from Jewish families across Europe and never returned to them. He found paintings, once owned by Jews, among the estimated six hundred thousand works of art stolen by the Nazis that had been hanging in art museums, with no one bothering to ask where they came from. He even lent support to efforts—including one by Hugo Princz—to hold German businesses accountable for their profits from slave labor by Jewish workers during World War II. Eizenstat’s work was so extensive and relentless that an editorial in the New York Times praised his attempts to “explore the dark corners of history.”
With the Flatow case, Eizenstat was not probing inaccessible corners as much as trying to find his way down a path that was filled with numerous political, legal, and emotional pitfalls. With lawyers planning to file other cases, Eizenstat knew he had to act swiftly. “There was a steamroller here,” Eizenstat said. “Congress had created a right without a remedy. Congress had said you could file a lawsuit for terrorism against a foreign country, but it did not say how you could collect. Instead Congress cast the burden back on the executive branch. It really raised expectations and put the executive branch in an extremely awkward position.”
But Eizenstat soon faced another nettlesome, unforeseen dilemma in President Bill Clinton’s own words and deeds. Eizenstat knew that Clinton had already voiced support for cases like Flatow’s when he signed the law allowing antiterror lawsuits. Separately, Clinton had also raised the possibility that the compensation for victims could come from bank accounts and other terrorist nation assets that had been frozen by the US government. But now, it seemed as if Clinton’s own State Department was siding with Iran against American citizens. Legally and politically, the strategy appeared confusing, even ridiculous. To Eizenstat, this was just the sort of conflicting message that inevitably embarrassed political leaders. The timing was bad, too. Adding to the dilemma, Bill Clinton was in the midst of battling allegations about his sexual affair with a White House intern. Republicans in Congress had already launched an impeachment investigation.
But with the Flatow case, the political and legal dilemma for Eizenstat was even more complicated. Clinton and Flatow seemed to have established a positive and personal rapport. The president not only consoled Flatow for his loss but never hinted that his lawsuit was troubling.
Besides Clinton’s telephone call to Flatow in Israel after Alisa’s death, the two had spoken several times afterwards. In one instance, Flatow asked Clinton for help in determining which terrorist group was responsible for Alisa’s death. Shortly afterward, Flatow and his lawyers were invited to the State Department, where they said officials told them that Iran had provided money to Palestinian Islamic Jihad, which carried out the bombing. While Flatow was never entirely sure that Clinton helped to arrange the State Department meeting (Clinton never said one way or the other), Flatow had come to believe the president was on his side and had opened an important door for his legal team to assemble important evidence against Iran.
Just before he filed his lawsuit, Flatow happened to meet Clinton again. Flatow told the president of his plans to take Iran to court. Clinton did not seem surprised, Flatow recalled. “I know what you’re doing,” Flatow remembers the president telling him. “You’re brave and courageous.”
Clinton and Flatow had not spoken since Lamberth’s ruling. But now, as he began to feel the full weight of the State Department’s challenge to his claim against Iran, Flatow decided to publicly criticize Clinton. In an interview on the CBS newsmagazine 60 Minutes, Flatow was asked what he would say to the president if he had another chance to speak to him. Flatow said he would ask Clinton a question:
“What are you doing to me?”
Several months after Judge Lamberth’s decision, and as criticism against President Clinton continued to build, Stuart Eizenstat asked to meet with Flatow.
Eizenstat’s office at the State Department was located in a section of Washington known as “Foggy Bottom.” But the neighborhood’s nickname had little to do with the occasionally obscure messages that emanated from the State’s legions of diplomatic experts. Long before Washington had become lined with elegant buildings, statues, and museums, “Foggy Bottom” was known mostly for the persistent mist that drifted off the Potomac River and shrouded the area’s streets.
Flatow was accompanied by his lawyers, Steve Perles and Tom Fay, as well as a staffer from Senator Lautenberg’s office. Eisenstat ushered the group into a conference room with a large horseshoe-shaped table. Flatow sat down on one side with Perles and Fay; Eizenstat and his staff took seats on the other side.
As he prepared himself to meet Eizenstat, Flatow decided to try to set a friendly tone. Flatow had made no secret of his disappointment that the Clinton administration had dispatched its lawyers to Judge Lamberth’s courtroom to stall his legal judgment against Iran. But as a lawyer familiar with the give-and-take of negotiations, Flatow figured that Eizenstat might be willing to help find a compromise that would penalize Iran and also protect US diplomatic interests. And so, Flatow hoped the meeting would not be confrontational. “You catch more flies with honey than with vinegar,” he thought as he thanked Eizenstat for inviting him to the State Department.
Eizenstat, however, seemed in no mood to compromise. He began by reiterating his belief that Flatow’s lawsuit could damage the ability of the State Department to conduct diplomatic relations overseas.
Flatow understood the argument. He reminded Eizenstat that his daughter, Alisa, had been murdered in an act of terrorism—and that a US District Court judge had ruled that a country officially labeled by the US government as a “state sponsor of terrorism” was complicit.
Eizenstat did not try to disagree. “If I was the father of a daughter who was blown up, I would want compensation,” Eizenstat said years later as he reflected on the meeting. “He lost his daughter. It’s impossible not to be sympathetic. But when you are in office, you have to look at broader issues.”
As the two men faced each other across the horseshoe, it was almost as if they were speaking about two different worlds. Flatow wanted assurances that his government was on his side. Eizenstat, representing that government, made no secret of his belief that larger political, diplomatic, and legal issues were at stake.
Eizenstat knew, for instance, that Flatow was merely the first of a long list of victims who would want to tap into Iran’s frozen assets—or into the assets of other nations, such as Cuba and Libya, that had also been designated as sponsors of terrorism. Not only did Eizenstat fear the backlash against American-owned properties in other nations if the victims’ families gained control of the frozen assets, but he felt he was playing a difficult game of arithmetic that neither he nor President Clinton could win. “Politically, there was tremendous support for paying the families,” Eizenstat said. “They had won court judgments. But the problem was we didn’t have enough frozen assets to be able to satisfy the judgments.”
As the discussion volleyed back and forth, Steve Perles, who had been listening quietly, found himself
becoming angry. He felt that the tone set by Eizenstat was not that of a negotiation. To Perles, it seemed more akin to a lecture and a subtle defense of President Clinton’s mixed messages on the issue of compensating victims of terrorism. “I knew what this was about,” Perles thought. “This was about a Jewish guy from the administration delivering a message to another Jewish guy.”
Perles felt the urge to interject, but held back. So what, he thought, if Flatow displeased Bill Clinton? The news was awash with stories about Clinton’s sexual dalliances with Monica Lewinsky, and a rising call on Capitol Hill for impeachment.
“It’s only Bill Clinton,” Perles remembered thinking. “He has his Lewinsky problems. He’s going to be impeached in a couple of months anyway.”
Finally, Perles spoke. He mentioned Judge Lamberth’s ruling and said that he and Fay planned to pursue their quest to compensate Flatow with Iranian assets.
“I have a duty to the Flatow family,” Perles said.
Eizenstat, the veteran negotiator, understood. As the meeting ended, Eizenstat asked his staff to give two cardboard boxes of files to Flatow. The files contained listings of Iranian government properties that had not been frozen by the US government. Perhaps Flatow could file claims against these Iranian-owned assets and collect a portion of his judgment.
Flatow was elated. Perles was cautious, as was Tom Fay.
As Perles left, one of the congressional staffers who watched the meeting, said, “Feel better now?”
The meeting with Eizenstat had been testy. But perhaps a partial solution to their troubles might be found in the boxes from Eizenstat.
As they rode back across Washington in a taxi, Perles and Fay began looking through the files.
“They were useless,” Perles said.