Washington, July 20: A Federal judge ordered the government to retain for now more than $650 million from assets taken from the Iraq government in order to guarantee compensation for 17 American former Persian Gulf War POWs tortured by their Iraqi captors. A treasury department spokesman said yesterday the order, restricting almost half the roughly $1.4 billion in Iraqi money still held in a New York account, will have no affect on transfers to Baghdad already scheduled as operating expenses for the emerging Iraqi government.

District judge Richard W Roberts of the US district court for the District of Columbia issued the temporary restraining order late Friday after hearing arguments from attorneys for the former prisoners of war and the government. The order is to continue for 10 days as the two sides present further briefs.
It ordered treasury secretary John Snow not to transfer to the Iraqi reconstruction effort "any amount of Iraqi assets that have been confiscated or vested by the United States" that would reduce to less than $653.07 million the amount held in a special account at the Federal Reserve Bank of New York.
The account represents what remains of $1.7 billion frozen in 1990, after then-president Saddam Hussein sent his troops into neighboring Kuwait and precipitated the Gulf War. Under hardened provisions of the USA Patriot Act, the Bush administration seized title to the money on March 20 this year as US troops invaded Iraq in the operation that ended Saddam's presidency. Bureau Report