Survivors and families of Americans killed or maimed in state-sponsored terrorist attacks are pressing Congress and the Trump administration to block any release of frozen Iranian assets until the federal compensation fund created for them is fully replenished. The fund, they say, is empty, and Washington keeps writing checks to foreign governments while American victims wait.
The push centers on the U.S. Victims of State Sponsored Terrorism Fund, a pool Congress established to compensate Americans harmed by nations the State Department has designated as terrorism sponsors. Iran is the dominant source of the claims. As Just the News reported, terror survivors and their advocates have taken their case directly to Capitol Hill, arguing that no frozen assets belonging to state sponsors of terrorism should be unfrozen or returned until every eligible American victim has been made whole.
The argument is straightforward: the United States holds billions in seized and frozen assets linked to Iran and other designated state sponsors. Victims who won federal court judgments against those nations were promised compensation from those very assets. Yet the fund has been allowed to run dry, even as diplomatic negotiations over Iran's nuclear program have periodically dangled the prospect of releasing frozen money back to Tehran.
The Victims of State Sponsored Terrorism Fund was designed to channel forfeited and frozen assets into payments for Americans who suffered at the hands of governments like Iran, Sudan, and Syria. Eligible claimants include hostages, bombing survivors, and families of those killed in attacks linked to Iranian proxies, including the 1983 Beirut Marine barracks bombing, the 1996 Khobar Towers attack, and the September 11, 2001, attacks.
But the fund has not kept pace with the judgments. Victims and their lawyers say the balance has been depleted, leaving thousands of claimants with approved awards and no money to collect. The Government Accountability Office estimated in August 2021 that $2.7 billion was still owed to 9/11 families alone, families who had missed earlier payment rounds in 2017 and 2018.
That shortfall prompted legislative action. The House passed a $2.7 billion compensation bill for 9/11 victim families, approving it in a lopsided 400-to-31 vote. Most Republicans supported the measure, though several voiced frustration that the legislation had taken years to reach the floor. As Fox News reported, the bill addressed longstanding inequities in payouts from the fund.
Rep. Jim Jordan, R-Ohio, criticized the pace of action at the time:
"There are potential solutions to this problem that we should have put forth earlier."
What alarms victim advocates now is the possibility that frozen Iranian assets could be released as part of a diplomatic agreement before the compensation fund is replenished. The concern is not hypothetical. During the Obama administration, the United States transferred $1.7 billion to Iran in connection with the 2015 nuclear deal, a move that infuriated terror victims and their families. Under the Biden administration, a prisoner swap deal in 2023 involved the release of $6 billion in frozen Iranian oil revenues held in South Korea, though the administration later said those funds were re-frozen after the October 7 Hamas attack on Israel.
Victim advocates are now urging the Trump administration and the current Congress to establish a firm legislative guardrail: no unfreezing, no asset transfers, and no sanctions relief for state sponsors of terrorism until every eligible victim has received full payment from the fund.
The logic, as survivors frame it, is a matter of priority. The frozen assets exist because the United States seized them from governments that financed or directed attacks on Americans. Those assets should first satisfy the debts owed to the Americans who were harmed, not serve as bargaining chips in diplomacy.
This is not the first time terror victim families have organized to prevent their claims from being traded away at the negotiating table. Families of Iranian terror victims have previously pushed the Trump administration to require full restitution before any deal unfreezes Tehran's assets, a campaign that has intensified as nuclear talks have resurfaced in public discussion.
The families argue that the pattern is clear. Each time Washington enters negotiations with Iran, the frozen assets become a concession point, and victim compensation slides down the priority list. They want statutory language that removes executive discretion from the equation entirely.
Supporters of the victims' position in Congress have echoed that concern. The 400-to-31 House vote on the $2.7 billion compensation bill demonstrated broad bipartisan support for paying the families. But passing an appropriation is different from building a permanent mechanism that prevents future administrations from sidestepping victim claims during diplomatic negotiations.
The survivors' ask is specific. They want Congress to pass legislation that conditions any release of frozen assets belonging to state sponsors of terrorism on the full funding of the Victims of State Sponsored Terrorism Fund. In practical terms, that means Iran does not get a dollar back until every American with an approved judgment has been paid in full.
They also want the fund's revenue streams strengthened. The fund currently draws from forfeited assets, penalties, and certain fines. Advocates argue that the pipeline is too narrow and too dependent on case-by-case enforcement actions. A more reliable funding mechanism, they say, would prevent the fund from running dry again.
The political environment may favor their cause. The Trump administration has taken a harder public line on Iran than either of its two predecessors, and congressional Republicans have shown consistent appetite for tying Iran policy to accountability for past attacks. Whether that translates into the specific legislative vehicle the families want remains an open question.
At the core of this fight is a tension between executive power in foreign affairs and Congress's control over appropriations and asset disposition. Presidents have historically claimed broad authority to negotiate the release of frozen assets as part of diplomatic settlements. Victim advocates want Congress to assert its own authority and draw a bright line that no president can cross without first satisfying the claims of American citizens.
That tension has played out in federal courts for decades. Victims who won default judgments against Iran in U.S. courts often found those judgments difficult or impossible to collect, because the executive branch intervened to protect diplomatic equities. The compensation fund was supposed to solve that problem. Its depletion, the families argue, proves that the solution was only as durable as Congress's willingness to keep funding it.
Investigators and auditors will need to determine exactly how much the fund currently owes, how many claimants remain unpaid, and what asset pools are available to replenish the balance. Authorities have not publicly confirmed a comprehensive updated figure since the GAO's 2021 estimate.
The families pressing this case are not asking for a handout. They hold federal court judgments. They were promised compensation by an act of Congress. The money exists, sitting in frozen accounts that belong to the governments responsible for their suffering.
The question is whether Washington will treat those judgments as binding obligations or as inconveniences to be managed around the next diplomatic deal. The survivors say they have watched that calculation play out before, and they are not willing to watch it happen again.
When a government seizes assets from a terrorist state and then fails to pay the Americans that state attacked, the problem is not a lack of resources. It is a lack of will.
