They Were Hostages in Iran for 444 days. Decades later, They’re Waiting for Compensation

LOS ANGELES — Dorothea Morefield was sipping coffee at her kitchen counter when a call came in: Iranian students protesting outside the U.S. Embassy in Tehran had stormed the building, a State Department official told her. Her husband, Richard, the U.S. consul general in Tehran, was caught in the frenzy.

The world, Morefield said, stopped on that day: Nov. 4, 1979.

“That first day, we didn’t know what was going on,” Morefield, now 85, said. “Had he been taken? Had he not? And then I saw a clip of him walking across the embassy lawn, surrounded. And I thought, ‘Ok, that’s one question answered.’”

Iran was in chaos then, roiled by the departure of the shah earlier that year and the return of the revolution’s leader, Ayatollah Ruhollah Khomeini, a longtime religious leader in exile. The U.S. had supported the shah’s regime — going as far as helping to overthrow the democratically elected prime minister of Iran decades earlier to reinstall Mohammad Reza Shah Pahlavi — and militants who had taken the embassy demanded that the United States turn over the deposed shah for trial by a revolutionary court.

For 444 days, the plight of the American hostages was a daily news story — and a quagmire for President Jimmy Carter as he campaigned for reelection, a race he ultimately lost to Ronald Reagan. Forty years later, victims of the Iran hostage crisis and their families face a different struggle, not with Iran, but back home, as they continue their decades-long battle for compensation.

In 2015, a congressional bill carved out a fund to compensate victims of state-sponsored terrorism. The fund is designed to help two groups: those who have secured final judgments in a U.S. District Court against a state sponsor of terrorism, and the Iran hostages, their spouses and children.

The U.S. Victims of State Sponsored Terrorism Fund is supported by money from organizations penalized for doing business illegally — including a portion of a record $9 billion fine against one of the world’s largest banks, BNP Paribas, levied for defying U.S. economic sanctions against Sudan, Iran and Cuba.

The legislation granted the Iran victims as much as $4.44 million each, or $10,000 per day of captivity. Yet only a small percentage of that money has come through, according to their attorney, Thomas Lankford.

The former hostages, their spouses and children have hit a snag, he said: relatives of 9/11 victims have also gained access to the fund, complicating the Tehran victims’ ability to be paid the full amount they are entitled to.

There is no question that 9/11 victims should be compensated, Lankford said. But he was surprised that relatives of 9/11 victims won judgments against Iran after a report by the 9/11 Commission said it found no evidence that Iran was aware of Al Qaeda’s planning for the Sept. 11 attacks.

For Morefield, whose husband died in 2010, the money itself is not as important as the recognition it provides — an acknowledgment that the hostages were victims of state-sponsored terrorism. She and her husband were able to move on from their experience, she said, but the turmoil left its traces: Richard never slept through the night and often woke up afraid. He had trouble sleeping in rooms with closed doors, a vestige of the time he was thrown into a cell in Iran and locked behind a steel door.

“If you’re going back to what would I rather have, (Richard) or the money, I’m glad I had my husband for 30 years,” Morefield said. “It was a very hard time … but money is a lot different at 85 than when you’re much younger. Still, I hope it happens.”

Morefield said her husband followed U.S.-Iran relations for the rest of his life. She hasn’t paid close attention over the last decade, she added, but despite the hostage crisis, she hopes the two countries can reestablish diplomatic ties.

“I go back to World War II,” she said. “I was in San Diego when Pearl Harbor was bombed. I grew up thinking we will never be friends with Japan … these things, they come and go, and for the world to operate you have to put what has happened behind and move forward.”

The hostages were released in 1981, after the Algerian government helped to broker an agreement between the U.S. and Iran to end the crisis. The Algiers Accords contained a provision, however, that barred the hostages from taking legal action against Iran in U.S. courts — a move that has upset some victims’ family members as much as the complications with the compensation fund.

“I do believe at the bottom of my heart that my father would have walked away from the money if he could have brought people into court under U.S. law and made them explain what they did to him,” Elizabeth Morefield, 62, said.

The attorney who administered the payouts to former hostages and their families, Kenneth R. Feinberg, said Iran victims have two “very legitimate” criticisms: that they should “receive all of what they are entitled to immediately,” and that 9/11 victims should not be eligible for that particular fund.

“The idea that 9/11 victims can come into this fund and basically, in overwhelming numbers, get a pro rata share of limited money is improper, unfair and inequitable,” said Feinberg, who retired from administering the fund earlier this year. “Congress ought to change the law to prevent 9/11 related claims from being under this program. I think they are right about that.”

Feinberg also served as special master of the U.S. government’s September 11th Victim Compensation Fund. The current problems with the fund pose a “dilemma,” he said, recalling the instances in which the Iran victims complained to him about their payouts.

“Each time, my answer was, ‘I am very sympathetic, but complain to Congress. You’re talking to the wrong person,’” he said. “I can’t change the law. It gets very, very emotional.”

Allyssa Keough Stevens remembers the summer she lived in Iran with her father in 1978, and the days she spent at the pool of their Tehran home. Some mornings, she would hop into a car and shop for jewelry while her father, William F. Keough Jr., ran the Tehran American School.

By the time tensions were mounting in Tehran in 1979, her father had moved posts, working at a school in Pakistan. He had returned to the embassy in Tehran to collect student records at the time of its seizure. Keough became a spokesman for the hostages during the most intense days of the crisis.

“He was only supposed to be in Tehran for the weekend,” Stevens said. “That didn’t work out for him.”

Keough died on his daughter’s 24th birthday in 1985, four years after he was diagnosed with amyotrophic lateral sclerosis, or ALS.

Her father and his wife, Katherine, testified before Congress about the need to provide the Iran victims restitution, Stevens said.

“Thirty-eight years ago, they were trying to get this done,” she said. “I am angry this has been such a difficult uphill battle for compensation. The hostages were put through hell, the families suffered, many still suffer on a daily basis.”

The 2015 bill came as a relief, she added — she still has voicemails from senators and former hostages from the day the legislation passed that she refuses to delete.

“There was so much excitement and people felt they were going to actually see closure. That hasn’t happened,” she said. “I recently sent a message to President Trump asking if he will ‘be the president to finally give closure to these American heroes.’ I’m still contacting D.C. political figures, reminding them the legislation was passed in 2015.”

When the U.S. signed the nuclear deal aimed at preventing Iran from obtaining materials that could be used to produce nuclear weapons that same year, Stevens said she felt a pang of hesitation about the nations renewing any diplomatic ties.

“But I also had this deep-down feeling, ‘Oh my God, maybe my son will one day be able to see Tehran,’” she said. “These horrible things happened, but it wasn’t the whole nation doing it.”

Relations between the U.S. and Iran have dramatically shifted since 2015 — the Trump administration imposed sanctions targeting multiple industries last year after withdrawing from the landmark agreement that had given Iran sanctions relief. The U.S. added more sanctions earlier this year.

The embassy takeover was the “first true act of terrorism against the U.S.,” Stevens said, and a precursor to the two nations’ current relationship.

“Why have these men and women not been held in the highest esteem by our government?” she said. “Why has legislation wording been misconstrued, and not honored?”

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