Senate Democrats and the Bush administration continue to butt heads over Libya despite a historic, multibillion-dollar deal that settled claims made against the government of Moammar Gadhafi by terrorist victims’ families.

The problem, according to lobbyists for the families, is that Libya has yet to pay into a $1.8 billion fund that was to be shared by the victims’ families. Libya agreed to set up the fund in exchange for victims’ families dropping lawsuits against the Libyan government.

The families and members of Congress are irritated with Secretary of State Condoleezza Rice’s September trip to Libya, the first visit in a half-century by a sitting secretary of State. They’re also unhappy that an assistant secretary at the Commerce Department went to Tripoli last week to help set up a commercial office in the country.

Sen. Frank Lautenberg (D-N.J.), who has championed the terrorist victims’ cause during their negotiations with Libya, protested both visits.

In a letter last week, Lautenberg and Sen. Robert Menendez (D-N.J.) wrote to Commerce Secretary Carlos Gutierrez “to reiterate that we intend to continue to oppose further advancement in the relationship” with Libya until they pay out the claims they agreed to in August.

Lautenberg also placed a hold on Gene Cretz’s nomination to be U.S. ambassador to Libya.

“While I welcome the recent progress on settling these claims, the process is not complete. Libya has not yet satisfied its obligations to U.S. victims of its terrorist acts, and I will object to this nomination’s moving forward until those victims receive justice,” Lautenberg said in testimony submitted for Cretz’s confirmation hearing before the Senate Foreign Relations Committee last month.

Senators have also renewed a ban on aid to Libya by dropping a provision blocking funds to the North African country in the recently passed continuing resolution.

In a response to Lautenberg and Menendez, Commerce agreed that Libya must fulfill its obligations under the agreement but said the United States must open up new areas for economic growth, according to a Commerce aide.

Some representatives of victims’ families are publicly questioning the value of the agreement.

“We keep sending high-ranking diplomats to Libya and again they are not fulfilling their obligations,” said Kara Weipz, the president of Victims of the Pan Am Flight 103.

“This legislation passed and this administration is not holding them accountable yet. I wonder if this was all for show,” said Weipz.

Weipz’s brother was on Pan Am 103 when a bomb in the airliner’s baggage hold exploded and brought it down over Lockerbie, Scotland, in 1988.

That attack and several other bombings in the 1980s were linked back to the Libyan government. Weipz and victims’ families turned to the courts for compensation and, after several years of litigation, won multimillion-dollar settlements against Libya.

Libya stalled on paying out many of those claims for years, even as it softened its position against the West. It ended its weapons of mass destruction program in 2003 and was dropped from the State Department’s list of state sponsors of terrorism in 2006.

The pact between Libya and relatives of the victims of terrorist attacks sponsored by the country was hailed as a historic breakthrough when it was signed in August.