Ex-hostages sue US treasury

Ten Americans held hostage by Iraq during the Gulf War are suing the US Treasury Department, it was reported today.

The move comes after Treasury officials refused to allow New York banks to hand over more than £6 million (€9.5 million) in compensation from Iraqi accounts.

But, according to the New York Post, Treasury Secretary Paul O’Neill has told JP Morgan Chase and the Bank of New York, which hold millions of dollars in accounts for Iraq, not to hand over the cash because Iraqi leader Saddam Hussein’s assets were frozen under a presidential order.

In a civil suit filed in Manhattan federal court, the 10 claim the Treasury ruling is "mistaken".

"This case starkly presents the question - why is the US Government preventing American victims of Iraqi hostage-taking from holding Saddam and his regime accountable for their crimes?" the lawsuit said.

Rob Nichols, a Treasury Department spokesman, said the department had not seen the lawsuit and could not comment.

The ten Americans were captured when Iraq invaded Kuwait on August 2, 1990 and released in December 1990.