NEW YORK (AP) -- A judge ruled Thursday that families of Sept. 11 victims cannot tap into Iraqi funds frozen by the United States at the start of the first Gulf War because the money will be spent to reconstruct war-torn Iraq.
U.S. District Judge Harold Baer issued the decision after family members sought to freeze some of the $1.7 billion in funds - which the Bush administration has already started to use to help pay for Iraq's revival _ to satisfy an earlier court ruling saying Iraq owed the families $63.5 million.
Baer said the law gave him little choice but to deny the request even though it may mean that the families are denied the only available source to satisfy the judgment.
``The government contends that these funds ... are needed to rebuild Iraq,'' Baer wrote. ``That need is clear, nonetheless one wonders whether American families who lost loved ones as a result of terrorism here and abroad ought not be compensated first.''
Earlier this year, Baer had concluded that Iraq aided Osama bin Laden's terror network prior to Sept. 11, 2001, when roughly 3,000 people died in attacks on the World Trade Center, the Pentagon and a hijacked plane that crashed in Pennsylvania.
Baer said lawyers for two victims ``have shown, albeit barely ... that Iraq provided material support to bin Laden and al-Qaida.''
James Beasley, a Philadelphia lawyer for the families, did not immediately return a telephone message for comment.
The ruling stemmed from lawsuits brought on behalf of the estates of George Eric Smith, 38, a senior business analyst for SunGard Asset Management, and Timothy Soulas, 35, a senior managing director and partner at Cantor Fitzgerald Securities. Both men worked at the World Trade Center.
A 1996 law permits lawsuits against countries identified by the State Department as sponsors of international terrorism.
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