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Inside Report (4)

What happened to all the money that Libya and iraq paid to US firms for airplanes that weren't delivered? US officials, looking for ways to punish Libya and Iraq for supporting terrorists, put the brakes on multimillion-dollar deals by the two nations to buy American-built aircraft. Libya had paid in full -- $48 million -- for eight military C-130 transports from Lockheed. Iraq and Libya together had advanced about $200 million to Boeing for passenger jets.

To date, none of the money has been returned. Boeing says it used the funds to pay for labor and materials that had gone into the aircraft. and Boeing won't return Libya's money until another buyer is found for the planes, it says. The sale to Iraq, Boeing suggests, could still go through.

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Meanwhile, Lockheed says Libya still wants delivery of the C-130's. The $48 million advance has gone into "corporate coffers."m

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