Smith, a Pan Am pilot who had flown the same kind of plane on the same route, raced to New York's Kennedy International Airport and arrived in the crew room in time to see live television pictures of the fire ignited by the crashing fuselage in Lockerbie, Scotland. He knew almost instantly that his wife, Ingrid, was dead.
Smith became a man with a mission. He buried his wife at the small English church where they had married. And then, with the $100,000 in life insurance payments as seed money, he turned his attention to catching terrorists.
The investment paid off in a big way last month.
Ramzi Ahmed Yousef, alleged mastermind of the 1993 World Trade Center bombing, was nabbed by U.S. and Pakistani officials as he lounged in an Islamabad guest house.
After disappearing for almost two years, Yousef was tracked and trapped with the aid of an associate who saw his face - and the promise of a reward - on a pack of matches.
The reward fund envisioned by Smith, and now funded by the U.S. government and airline and pilots associations, is part of a serious but largely unpublicized shift in strategy in the U.S. battle against terrorism.
Gone are the days of deals or mediation - such as what the Reagan administration tried in the arms-for-hostages swap with Iran in the 1980s, or what the Washington administration did in 1795 by trading a fully outfitted warship for 115 sailors held by Barbary pirates. Rewards have turned out to be more effective.
"It is one part of a broader effort that reflects the dramatic evolution in our counterterrorism efforts and our thinking about what we can concretely do," said Anthony Quainton, assistant secretary of state for diplomatic security.
"It's also an important way of saying, `We don't and won't forget.' These acts aren't something on our radar scope for one day and then pass off as other heinous acts take place."
The change has not come without misgivings. Skeptical officials have questioned the morality of paying off witnesses, in some cases almost as unsavory as the fugitives they turn in. They admit concerns about creating a marketplace for kooks, liars and frauds whose leads could waste untold investigative hours.
But so far, a growing record of achievements has tilted the balance.
The reward fund, which makes up to $4 million available for information leading to the arrest of terrorists, has played an unpublicized part in the identification, arrest or conviction of extremists under secret U.S. indictment on four continents, State Department officials say. Shortly after two U.S. diplomats were killed and a third person wounded in an attack in Karachi, Pakistan, on March 8, the U.S. ambassador to Pakistan posted a $2 million bounty for the culprits.
The reward program has brought with it new tactics. Television ads featuring such Hollywood stars as Charles Bronson, Charlie Sheen and Charlton Heston are broadcast in countries where incidents have occurred, notably the Middle East, and subtitled in the appropriate language. They appeal to "ordinary people" to do "extraordinary things" - such as handing over their local terrorist to the police.
The pack of matches that apparently doomed Yousef showed his face on the cover and, in a host of local languages, described how to turn him in and collect the bounty. Thousands of the matchbooks had been disbursed in places he frequented.
"As long as Yousef is free," the bright green matchbook warned, "more innocent lives could be at risk."
Since the program was instituted in 1990, it has paid more than $3 million to more than 20 people. Several men have been imprisoned and hundreds of American lives have been saved, the State Department said.
The idea of offering a reward was approved by Congress in the 1984 Act to Combat International Terrorism. But it was virtually stillborn because of small rewards, a complex bureaucracy and lack of publicity.
The reward program didn't take off until after Pan Am 103 - and Smith's prodding.
"I couldn't stand doing nothing," he said. "So I got the notion that it might be helpful to offer a bigger reward for information. Because many of the countries and parties sponsoring terrorism can afford to buy loyalty, experts told me it'd take $3 million to $5 million to make a difference - an amount clearly out of my reach as an individual."
So Smith, a native of Homer, Alaska, went to Sen. Frank Murkowski, R-Alaska, who agreed to sponsor legislation increasing the reward to up to $2 million and expanding its terms to include prevention of terrorism.
Smith then pressed for matching funds from Pan Am, which suggested that the whole industry should get involved. His efforts led the Air Transport Association and the Air Line Pilots Association to each pledge $1 million more.
The idea didn't have universal support. Some Justice Departme