WASHINGTON, June 23 (Reuters) - The U.S. government will no longer threaten to prosecute families who try to pay ransom to win the release of American hostages held overseas, and the United States will directly negotiate with militants holding them but will not pay ransom, officials said on Tuesday.
The policy, to be announced by President Barack Obama on Wednesday, changes the way the government handles cases in which Americans are taken hostage by groups like the Islamic State and al Qaeda.
The announcement follows a six-month review prompted by sharp criticism of the Obama administration by some victims' relatives, who said they had been threatened with prosecution if they tried to raise money to pay a ransom.
The Obama administration will create an interagency "fusion cell" with personnel from the FBI, Pentagon and State Department to address hostage situations in a more comprehensive way, according to a senior U.S. official who spoke on condition of anonymity because the policy has not been formally announced.
The new policy will allow the U.S. government to communicate and negotiate with militants holding American hostages and help family members to secure the safe return of hostages.
In an official affirmation of a policy that the FBI has informally followed for decades, the administration said families will not be prosecuted for trying to pay ransom to win a hostage's release.
Several U.S. hostages have been killed in the past year in the Middle East, including some beheaded in videos released by Islamic State militants.
Unlike some European allies, the United States insists it will not make concessions to hostage-takers and has a strict no-payments strategy, saying ransoms only encourage further kidnappings and put funds in the hands of the militants.
But last year it exchanged five Taliban detainees held at the U.S. naval base at Guantanamo Bay, Cuba, to secure the release of U.S. Army Sergeant Bowe Bergdahl, who had been held five years by Taliban forces.
Also last year, two senior administration officials, one from the National Security Council and one in the State Department, repeatedly warned families of captives held in Syria that they could face prosecution if they paid a ransom to Islamic State. At the same time, FBI officials were telling the families they would not be prosecuted if they paid a ransom.
White House spokesman Josh Earnest told reporters Obama would not change the prohibition against making concessions to hostage-takers.
Families have sharply criticized restrictions on their efforts to win the freedom of loved ones and said the government did not do enough to secure their release.
Elaine Weinstein, whose husband Warren was inadvertently killed in a U.S. drone strike in January targeting an al Qaeda compound in Pakistan where he was held, said the information she received over 3-1/2 years from the Obama administration was "inconsistent at best and utterly disappointing."
"This review will not bring Warren back. It is our most sincere hope that it was conducted fully and frankly so the U.S. government can have an honest conversation about the areas where it falls short," Weinstein said in a statement.
WRONG TO THREATEN FAMILIES
Earnest said administration officials were briefing family members of hostages and lawmakers on the policy overhaul. He said Obama would issue a presidential policy directive and sign an executive order to carry out the new policies.
Senior administration officials said the NSC and State Department officials had been wrong to threaten the families, adding the FBI and Justice Department made decisions on possible prosecutions and the FBI was correctly implementing the policy.
The officials said one goal of the review had been to ensure that families no longer received mixed messages.
Even with a green light from the government to try to pay private ransoms, families face huge challenges in freeing captives. Over the past decade, European governments are believed to have paid militant groups more than $100 million in ransoms, according to U.S. and British officials.
As a result, the size of a ransom for an individual Western hostage has risen to an estimated $1 to $2 million in parts of the Middle East, they said. (Additional reporting by David Rohde; Writing by Will Dunham, Editing by David Storey and David Gregorio)