Commentary Magazine


Topic: Linde. v. Arab Bank

Banking on Terror: The Verdict

Earlier this week, the jury in a federal courtroom in New York City handed down a verdict that should stand as a precedent for future counter-terrorism efforts. In this case America’s judicial system proved itself capable of doing something the government has not managed to do: holding financial institutions in supposedly moderate Arab countries responsible for their complicity in Hamas terrorism.

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Earlier this week, the jury in a federal courtroom in New York City handed down a verdict that should stand as a precedent for future counter-terrorism efforts. In this case America’s judicial system proved itself capable of doing something the government has not managed to do: holding financial institutions in supposedly moderate Arab countries responsible for their complicity in Hamas terrorism.

The case, Linde v. Arab Bank, is the result of a lot of hard work by the Israel Law Center to trace those who helped fund Hamas’s terror campaign during the second intifada more than a decade ago. During the course of that terrorist war of attrition launched after the Palestinians rejected an Israeli peace offer in 2000, suicide bombers and other killers murdered more than a thousand Israelis and Americans. The 297 plaintiffs in the case are the survivors or the families of those Americans killed in 24 separate Hamas terror attacks from 2001 to 2004. It was during this period that Hamas operatives operating under the aegis of the so-called Saudi Committee used a branch of the Arab Bank in Beirut to fund activities of the terror group including providing bonuses to the families of suicide bombers as a reward for the slaughter inflicted by the terrorists.

The bank claimed it didn’t know the account was being used for terrorist activities but this excuse was exposed as a blatant lie during the course of the trial. More importantly, it sought to quash the case and to refuse to divulge information about its accounts. In that effort, it was supported by the U.S. State Department that seeks, as is its wont, to appease both the Saudis and the Jordanians even if that means excusing the funding of terror.

Fortunately, the courts would not let the bank get away with withholding information and the jury was also not persuaded by the idea that those who launder money for terrorists should have impunity for their illicit activities.

The point here is not merely one of law but of policy. After 9/11 the United States moved heaven and earth to cut off every possible method for financing al-Qaeda. But that effort, which forced even Arab allies to cooperate with the restrictions was not uniformly applied to Hamas during that period. With the connivance of their friends in the Arab world who call themselves allies of the West, Hamas was been able to keep the flow of money into their coffers long after it was clear that there was little functional difference between the Palestinian group and other Islamists.

Those who claim the Arab banking system will collapse if the verdict is upheld are being hysterical. The Arab Bank should pay the victims billions but we need not hold a benefit for its owners. Like all criminals, they must pay for their misdeeds. More importantly, their plight should stand as a warning to others in the Arab world that those who fund terror will, sooner or later pay a serious price for doing so.

Let us hope that the appeals courts will be as sensible as the trial judge and the jury and uphold this decision. Like them, the appeals courts should understand that there is more at stake here than money. Hamas terrorists and their bankers should not be allowed to get away with murder.

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The Arab Bank and the Future of Terror

A lot of lip service is paid these days by both the U.S. government and the mainstream media about the need to stop terrorism and to isolate those who support it. But a trial that began on Thursday in federal court in New York City may have as much to do with whether it will be possible to isolate terrorists and their funders as anything done by Washington.

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A lot of lip service is paid these days by both the U.S. government and the mainstream media about the need to stop terrorism and to isolate those who support it. But a trial that began on Thursday in federal court in New York City may have as much to do with whether it will be possible to isolate terrorists and their funders as anything done by Washington.

The case is Linde v. Arab Bank, a lawsuit that seeks to hold the Arab Bank, a Jordanian bank with branches throughout the Middle East accountable for the fact that it served for six years as the conduit for funding the Hamas terrorist organization. It was the Arab Bank to which families of Hamas suicide bombers and other terrorists to collect payment for their services. While the operations of Hamas fundraisers in the United States, like the Holy Land Foundation (for which the Council on American Islamic Relations or CAIR initially served as a political front) have been shut down by the federal government, this is the first time a foreign bank that was used to funnel money to Hamas will be called to account in court for its role in promoting murder and mayhem.

The case, which has taken many years of hard work and complicated litigation by the Israel Law Center to bring to court. The 297 plaintiffs in the case are the survivors or the families of those Americans killed in 24 Hamas terrorist attacks from 2001 to 2004 when the Arab Bank was laundering money for the group. But the bank hasn’t been their only opponent. From the inception of this case, the U.S. State Department has fiercely opposed efforts to enforce the federal Anti-Terrorism Act that specifically targets the funders of acts of terror committed against Americans.

As I noted back in April, the State Department backed the refusal of the bank to comply with court rulings that required it to produce records of its clients but fortunately the U.S. Supreme Court turned down their appeal leaving Judge Nina Gershon to tell the jury in the case that it may infer from their non-compliance that it did provide financial services to terror groups via Saudi funders.

At stake here is whether, as the State Department argues, it is unfair for foreign banks that comply with laws in their own countries, to be brought to book in the U.S. for their role in spreading terror. Given the enormous financial resources behind the defense as well as the opposition of the diplomatic establishment to any effort to treat Hamas in the same manner that al-Qaeda and its funders have been dealt with by the courts the odds have always been against the plaintiffs.

But even a cursory look at the facts of the case shows that if the courts take the law as seriously as they should, this is an open and shut case. Despite its pleas of innocence, there’s little doubt that the Beirut branch of the Arab Bank knew exactly what it was doing when it took the money from Hamas spokesperson Osama Hamdan and then subsequently distributed to the relatives of terrorists who blew themselves up in some of the most horrific acts of terrorism of the last decade including the 2001 Sbarro Pizza bombing in Jerusalem. Under U.S. law, Americans who were killed or injured in such acts of terrorism have a right to sue those who funded the murderers.

Yet some observers, like those quoted in a New York Times article on the case, believe a victory for the plaintiffs will make it harder for banks to do business in “strife torn areas” of the globe. They further argue that a ruling against Arab Bank would set a precedent in which all financial institutions could be held accountable for the crimes of their clients.

But this is nonsense. Banks are not liable if criminals have accounts there. But when banks become the conduit for the movement of funds to terrorism, they are not playing a passive role in the crime. They are directly facilitating groups that traffic in murder for ideological reasons. In the case of Arab Bank, which openly supported the siege of Israel in its own publications, the defense that it didn’t know what it was doing is hardly credible.

Moreover, as we have learned in the last decade since 9/11, straightforward law enforcement efforts aren’t enough to shut down terrorism. The only way to effectively choke off terror groups like al-Qaeda or Hamas is to shut down their financial networks that use institutions like the defendant to both bankroll their operations and provide what amounts to insurance policies for suicide bombers.

If the plaintiffs in Linde v. Arab Bank prevail, as they should, it will deal a critical blow to Islamists and others who use the banking system to launder the vast sums they get from Arab and other Muslim sources to pursue a genocidal war against Jews and Israel. If they do, the State Department will complain but the world will be a lot safer.

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State Dept. Sides with Hamas Funders

Though it is no longer called the “war on terror,” the Obama administration has been eager to be seen as a scourge of international terrorism. It has continued many of the Bush administration’s security policies with regard to seeking intelligence on terror groups and has been so aggressive about pursuing a policy of assassinating terrorists that liberals like Ron Wyden and libertarians like Rand Paul have attacked it. But when it comes to shutting down the financing of some terrorists, the administration is something of a house divided. As the New York Times reports today, the State Department is pressuring the Department of Justice to intervene on behalf of a Jordanian bank in a federal lawsuit in which it stands accused of funneling money to terrorists who killed Americans. Apparently, Foggy Bottom wants the administration to support the Arab Bank’s effort to get the U.S. Supreme Court to overturn sanctions imposed by a lower court because of the financial institution’s refusal to hand over customer records.

While this sounds like a complicated litigation, the issues at stake here are not difficult to comprehend. At issue is whether the United States will ignore the standards it has applied to other terror-related cases as well as its past stands on foreign bank secrecy rules in order to help get a bank owned by friendly Arabs off the hook for their role in funding the murder of American citizens. If President Obama’s solicitor general does what the State Department is asking him to do, it will mean the nation is not only turning its back on American victims of Hamas terrorism. It will also show that the administration’s much ballyhooed toughness on terror doesn’t apply to its efforts to bring supporters of Palestinian murderers to justice.

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Though it is no longer called the “war on terror,” the Obama administration has been eager to be seen as a scourge of international terrorism. It has continued many of the Bush administration’s security policies with regard to seeking intelligence on terror groups and has been so aggressive about pursuing a policy of assassinating terrorists that liberals like Ron Wyden and libertarians like Rand Paul have attacked it. But when it comes to shutting down the financing of some terrorists, the administration is something of a house divided. As the New York Times reports today, the State Department is pressuring the Department of Justice to intervene on behalf of a Jordanian bank in a federal lawsuit in which it stands accused of funneling money to terrorists who killed Americans. Apparently, Foggy Bottom wants the administration to support the Arab Bank’s effort to get the U.S. Supreme Court to overturn sanctions imposed by a lower court because of the financial institution’s refusal to hand over customer records.

While this sounds like a complicated litigation, the issues at stake here are not difficult to comprehend. At issue is whether the United States will ignore the standards it has applied to other terror-related cases as well as its past stands on foreign bank secrecy rules in order to help get a bank owned by friendly Arabs off the hook for their role in funding the murder of American citizens. If President Obama’s solicitor general does what the State Department is asking him to do, it will mean the nation is not only turning its back on American victims of Hamas terrorism. It will also show that the administration’s much ballyhooed toughness on terror doesn’t apply to its efforts to bring supporters of Palestinian murderers to justice.

The case, Linde v. Arab Bank, revolves around the efforts of relatives of Americans killed by Hamas terrorists during the second intifada to use the federal Anti-Terrorism Act to bring those who funded the Islamist terror group to book for aiding and abetting these atrocities.

As the Israeli Law Center, the group that has pursued a relentless and courageous campaign to hold terror funders accountable, notes on its website:

The Arab Bank is a Jordanian financial institution that has funneled funds for organizations claiming they are legitimate charities. In fact, they were routing large sums of money to support the violent activities of Hamas and other terrorist organizations. These organizations served as agents of Hamas and used the Arab Bank to receive deposits and process wire transfers. The Bank was aware that these organizations are fronts that support terrorist activities, such that the Bank’s continued provision of services to these groups facilitated their illegal activities. One account number belongs to Hamas itself and was used to collect funds in support of its violent activities.

Further, the Saudi Committee In Support of the Intifada Al Quds (“Saudi Committee”) was established as a private charity in Saudi Arabia whose purpose was to support the intifada and the families of the terrorists who have died, as well as subsidize the Palestinian terror campaign. The Saudi Committee furnishes awards to terrorists’ families as a reward for suicide attacks. The Arab Bank is the exclusive financial administrator for the Saudi Committee. These payments create an incentive to engage in terrorist acts by rewarding all Palestinian terrorists, regardless of their affiliation with a particular group.

Despite the Arab Bank’s pleas of innocence, the facts of their funding of Hamas are not in dispute. But, as the Times notes, Secretary of State John Kerry doesn’t want to upset either Jordan or the Saudis any more than they have already been by Obama administration policies that have strengthened Iran at their expense. What he wants is for the U.S. government to plead diplomatic necessity to the courts and tie up the plaintiffs in circles.

But in doing so, the Justice Department would be flouting the same standards they have applied to other cases in which they have doggedly pursued the funders of al-Qaeda and other groups that have targeted Americans as well as in tax cases in which the U.S. has sought to override the efforts of foreign banks to maintain secrecy about their activities.

Claims of diplomatic necessity are contradicted by the experience of the post 9/11-era in which all banking institutions have been forced to disassociate themselves with terror or face the consequences. Jordan will survive a court defeat by the Arab Bank, as will the Saudis.

A decision by the administration to side with the Arab Bank against terror victims would be an outrageous abuse of power as well as of hypocrisy. U.S. law demands that the government allow those who have been hurt by terrorists to pursue the funders of murder. For President Obama and Secretary of State Kerry to interfere with the course of justice would be yet another signal that their anti-terror principles don’t apply to the victims of Palestinian killers.

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