Arab Bank Found Liable In Hamas-Funding Case

Arab Bank was found liable Monday by a Brooklyn federal jury of knowingly providing financial support to the terrorist organization Hamas, marking the first time that a financial institution has been held civilly liable for supporting terrorism.

The jury returned the verdict Monday afternoon having deliberated nearly two days. A new trial must now be held with a new jury at which time evidence will be presented about nearly 300 Americans who were killed or maimed in 24 Hamas terrorist attacks in Israel from 2001 to 2004. The jury will then be asked to determine how much the bank must pay those who were injured or the estates of those killed.

The verdict came just hours after the Second Circuit U.S. Court of Appeals in New York unanimously reinstated a similar lawsuit against a different bank — National Westminster Bank — by about 200 American victims of alleged Hamas terrorism in Israel.

The appeals court said a lower court erred in dismissing two suits against NatWest, whose parent company is the Royal Bank of Scotland Group.

These rulings are seen as possibly making it easier for American victims of terrorist attacks to pursue similar civil suits against banks they contend ignored their clients’ links to terrorism.

Gary Osen, one of the plaintiffs’ attorneys in the Arab Bank case, said after the verdict that the jury had “found Arab Bank complicit in the deaths and grievous injuries inflicted on dozens of Americans. Every bank, every company and every government in the world now has to decide whether it is willing to continue doing business with an institution proven to have knowingly supported terrorism and proven to have helped murder Americans.”

In a statement Monday, Arab Bank said would appeal the decision, saying its hands were tied by pretrial rulings.

The jury heard evidence that Arab Bank, which is based in Jordan, transferred more than $30 million to Hamas-controlled institutions in the Gaza Strip and the West Bank. In addition, it heard evidence that it served as the conduit between several charities that funneled money to Hamas. Among them was the Saudi Committee in Support of the Intifada Al Quds, a Saudi charity established in October 2000 that provided financial support to the families of Hamas suicide bombers, those who were injured in attacks and those who were imprisoned by Israel.

After the jury began deliberations, the plaintiffs received a memorandum from the U.S. State Department that said the U.S. in 2003 had provided Saudi authorities with evidence that the Saudi Committee “was forwarding millions of dollars in funds to the families of Palestinians engaged in terrorist activities, including those of suicide bombers.”

Michael Elsner, an attorney for the plaintiffs who had requested the information, said in a statement that the “timing of the State Department’s disclosure raises deeply troubling questions.”

“Obviously, the jury reached the same conclusion about the Saudi payments in finding Arab Bank guilty for its support of Hamas, but this last minute disclosure of this evidence six years after we requested it and hours after the jury began its deliberations is telling,” he said. “We don’t expect the State Department to take sides in a civil case, but by withholding critical evidence until the jury began its deliberations, the State Department continues its unfortunate pattern of siding with foreign interests against American victims of terrorism.

“Failing to timely disclose this document permitted Arab Bank to falsely characterize the American government’s view of the Saudi Committee. That is simply unforgivable.”

In the trial, which lasted nearly six weeks, the jury heard evidence that Arab Bank held accounts of several senior Hamas leaders, including Hamas founder and spiritual leader Sheikh Ahmad Yassin and current Hamas leaders Osama Hamdan and Ismail Haniyeh.

In his summation last Thursday, Mark Werbner, another plaintiffs’ attorney, had asked the jury of eight women and three men to “send a message” by finding Arab Bank guilty of providing Hamas with the money it needed to carry out the 24 deadly attacks.

“They won’t accept responsibility unless and until you make them,” he said. “It was pretty foreseeable that by helping this organization and facilitating financing services that bad things were going to happen. … The message you can send will reverberate around the world and reverberate as a message to these families that there is justice.”

During the course of the trial before Brooklyn Federal Court Judge Brian Cogan, officials and employees of Arab Bank testified that they had no idea that any of the financial transactions they processed was for Hamas terrorists or for charities that were raising money for Hamas.

Attorneys for the 297 American plaintiffs killed or seriously injured in the terror attacks claimed Arab Bank did know and that Hamas could not have acted without the Jordanian-based bank, which is one of the largest financial institutions in the Middle East.

In his closing arguments to the jury, another attorney for the plaintiffs, Tab Turner, reminded them of the gravity of this case.

“Never has anyone sat on a case of finance terrorism, with issues like you have to decide in this case,” he said. “You have more power today to change the way the world of banking operates than anyone else on the face of the earth. … The greatest force of evil in our society today is terrorism. And these terrorists cannot function, they cannot operate, they cannot preach, they cannot buy weapons, they cannot commit suicide with bombs, without money.”

The case comes at a time when U.S. officials are maintaining carefully scrutiny of cross-border banking transactions. Within the last three years, they stopped the government of Qatar from paying the salaries of Hamas employees. Hamas has been on the U.S. terrorist list since 1997.

Despite defense claims that Arab Bank struggled financially during the wave of Hamas terrorism, Turner said the bank actually made a profit of $2 billion in 2003 alone.

“This bank wasn’t suffering, he said. “In fact, this bank was the only bank making money off of terrorism. …What they are interested in is protecting their pocketbook. Somebody has to step up to the plate and say, ‘Not any more are we going to let you run millions and millions of dollars to these terrorists and take people's lives. It stops right here in Brooklyn.’

“That is how we stop terrorism. You don’t stop them with bullets. You don’t stop them with smart bombs. You take the money away from them.”

The attorney for Arab Bank, Shand Stephens, said in his summation that there had not been “one word of testimony that anyone [associated with the bank] supported terrorism — not one word.”

In fact, he stressed, the evidence showed that the bank ran all transaction requests through a computer program known was OFAC (Official Foreign Asset Control) to prevent facilitating transactions for terrorists. He said virtually all of those the plaintiff claimed were Hamas terrorists and for whom the bank handled transactions were not on the OFAC list. In one case in which a terrorist’s name was on the list, the transaction went through because the name was spelled differently, Stephens said.

Turner insisted, however, that Arab Bank would be guilty of aiding Hamas if the jurors believed the “bank furnished material support or resources to any person acting on behalf of Hamas” regardless of whether the person was on the OFAC list.

Regarding the claim that Arab Bank helped charities that raised money for Hamas, Stephens noted that the United States Agency for International Development “gave money to charities that they [the plaintiffs] say were Hamas controlled.” And he said, “Most of the charities they say were controlled by Hamas were founded before Hamas was founded.”

The plaintiffs had argued that by paying the families of Hamas terrorists killed in the very attacks they carried out, the bank was aiding Hamas terrorism. But Stephens insisted, “You do not punish a family of someone who has committed a criminal act.”

He also acknowledged that charity money went to support Hamas terrorists injured in terror attacks, as well as to those imprisoned by Israel for their actions. But he said it was all done in the open on websites for all to see — and that the Israeli government approved of the payments — a claim plaintiffs contradicted in their summation.

“Thousand of Palestinians have been imprisoned,” Stephens said. “It is said that 10 percent of the whole population has been imprisoned — so there is a huge need for families to be helped.”

Regarding a payment to a terrorist who subsequently blew himself up in a suicide bombing, Stephens said simply: “Nobody knew [he] was going to blow himself up.”

Stephens tried to cast doubt on whether Hamas committed the 24 attacks. But the plaintiffs’ attorneys noted that in many of the 24 attacks the terrorists themselves made videos saying they were with Hamas and lauding their planned acts in the hours before they carried out the attacks.

Turner said there were also bank records that Arab Bank refused to release for the trial and noted that the judge told the jury that it may infer those records were damaging to the bank.

“It wasn’t a mistake” the records were withheld, Turner told the jury. “This bank said no, we’re not giving you those records. What’s so important in those records that they don’t want the jury to see? They did not want you to see the money going into those accounts, the money going out, where it was going — and the internal bank correspondence discussing the accounts.”

Holding up a poster of Hamas funder Sheik Ahmed Yassin, who had an account at the bank, Turner insisted he would have been instantly recognized in any bank branch in the Middle East.

“This is like J-Lo walking in,” he said, referring to the singer/actress Jennifer Lopez.

But Stephens insisted: “This is a case about banking and banking procedure and rules and regulations. They have to prove that the bank caused these attacks — that the bank was the proximate cause of each and every one of these attacks — and they have not tried to do that with even one of them.”

But Turner in his summation countered by saying, “This [trial] is not about banking; it’s about real people who are here for justice.”

“The one thing you did not hear any evidence about were the statements of the victims — 300-plus victims,” he said, noting those would come during another trial should the jury find Arab Bank knowingly and willfully provided and distributed money to Hamas terrorists in violation of the U.S. Anti-Terrorism Act.

“That does not mean that the 300-plus victims are to be forgotten,” Turner added.

Plaintiffs in the NatWest case now awaiting trial claim the bank maintained accounts from 1994 until 2007 for Interpal, which the U.S. and Israel said fund Hamas. In August 2003, the U.S. Treasury Department labeled Interpal a “specially designated global terrorist.”

Interpal claims it is a London-based charity that provides humanitarian aid to Palestinians.

Writing for the three-judge court, Judge Pierre Leval said the U.S. Antiterrorism Act requires that plaintiffs prove only that National Westminster Bank knew or was deliberately indifferent as to whether Interpal provided material support to Hamas, “irrespective of whether Interpal’s support aided terrorist activities of the terrorist organization.”

In dismissing the suit in March 2013, Brooklyn Federal Judge Dora Irizarry had ruled that the plaintiffs failed to prove that the bank knew or deliberately ignored Interpal’s role in funding Hamas. She noted that British authorities had expressly permitted NatWest to maintain Interpal’s accounts after finding no evidence that it financed terrorism.

But Leval said the opposite conclusion of the U.S. Treasury precludes a summary dismissal of the case.

Gary Osen, who represents some plaintiffs in the NatWest case as well as in the Arab Bank case, was quoted as calling it a “major victory for American terror victims.”

Peter Raven-Hansen, a law professor at George Washington University, told Reuters that a foreign government’s opinion about “whether a terrorist organization can have a good side and a bad side is irrelevant under the statute when the United States has decided that terrorist organizations don’t have good sides.”

stewart@jewishweek.org