Commentary Magazine


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.

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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