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Judge bars Iraqi funds from 9/11 suit


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NEW YORK (CNN) -- A federal judge ruled Thursday that families of the victims of the September 11 attacks cannot have access to Iraqi funds seized by the United States in 1990 because the money is "needed to rebuild Iraq."

U.S. District Court Judge Harold Baer issued his 13-page decision after family members sought to freeze some of the $1.7 billion in assets to satisfy an earlier court ruling saying Iraq owed the families $63.5 million.

The suit was brought by the estates of George Eric Smith and Timothy Soulas, killed in the attacks two years ago.

"These plaintiffs lost love ones in the catastrophe at the World Trade Center on September 11, 2001, yet they along with others, such as the prisoners of war tortured by the former Iraqi regime during the Gulf War in 1991, are being denied any recovery," Baer wrote in his ruling.

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"The government contends that these funds, which might otherwise be used for compensation, are needed to rebuild Iraq."

Baer said Iraq's frozen assets became property of the United States when President Bush signed an executive order to that effect in March indicating the money was earmarked for Iraq reconstruction.

Baer ruled in May that the plaintiffs had shown there was a link between Iraq and al Qaeda leader Osama bin Laden in the World Trade Center attacks and that damages must be paid by bin Laden, Saddam Hussein and the Iraqi government.

"I conclude that plaintiffs have shown, albeit barely, 'by evidence satisfactory to the court' that Iraq provided material support to bin Laden and al Qaeda," Baer wrote in his May 7 decision.

George Eric Smith, 38, was a senior business analyst for SunGard Asset Management Systems/Global Plus, and Timothy Soulas, 35, was a managing director of foreign currencies for Cantor Fitzgerald.

Smith was not married and had no children. Soulas is survived by his wife, Katy, and six children. The families' attorney, James Beasley Jr., said his clients were disappointed with Baer's decision.

"We need this money for humanitarian aid in America," Beasley told CNN. "We totally respect Judge Baer, but disagree with his interpretation of what power the president has."


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