Ten years in the making, a landmark terrorism-related case is set to go to trial this week in New York. It has unearthed shocking documentation of the formalized network in which Mideast charities solicited funds to reward the families of Hamas suicide bombers. Interest in the lawsuit is heightened given the current violent outbreak between Israel and the Palestinians.
The plaintiffs are 300 U.S. nationals who were victims in 24 terrorist attacks between 2000 and 2005 while in Israel. Many were vacationing. They were caught in the crossfire during the “second intifada,” or Palestinian uprising.
But instead of a criminal case aimed at the attackers, the lawsuit goes after the prominent international Arab Bank for allegedly knowingly providing material support and services to Hamas, a designated terrorist group. Arab Bank contends it did not knowingly serve terrorists.
Instead of going after their attackers, terror attack victims are targeting Arab Bank.
Terrorism financing expert Juan Zarate, author of “Treasury’s War,” told The Daily Signal the litigation is being closely monitored by other banks, as well as foreign governments and U.S. officials.
“This case raises the question of not only the responsibility of a bank to know its customer, especially in the Middle East where you have lots of entangled relationships that may create risk, but also how far they have to go to interpret the political framework and environment,” said Zarate, the Treasury Department’s assistant secretary for terrorist financing under President George W. Bush.
Cash Rewards for ‘Martyrs’
New York attorney Mark Sokolow, his wife and two of his teenaged daughters were shopping at a shoe store in Jerusalem on Jan. 27, 2002, when Wafa Idris, the first female suicide bomber in the conflict, detonated a 22-pound bomb stashed in her backpack. The explosion killed Idris, 28, and one other person and wounded 150 others. Sokolow and his family were injured—but survived.
Documents obtained through discovery reveal an intricate system set up to reward Idris’ family and other so-called Palestinian “martyrs.” The network included a charity called the Saudi Committee for the Support of the Intifada al-Quds, which advertised throughout the West Bank and Gaza, asking people to contribute to the families of suicide bombers.
The Saudi Committee allegedly collected millions of dollars from individuals and organizations globally, including many terrorist organizations, and funneled the funds through Arab Bank to Hamas and its operatives, including the families of suicide bombers, prisoners and other martyrs.
The lawsuit reveals one suicide bomber’s family received a payment of $5,316.
After violent attacks, terrorists and their families were instructed to bring proof of their identity to branches of Arab Bank, where they received cash rewards. The lawsuit alleges that Arab Bank served as the effective paymaster for the claims, knowing that the funds were going to terrorists.
According to the lawsuit, Idris’ family presented documentation to Arab Bank and received the equivalent of $5,316. That was a relatively large sum: five times the average annual income per person in the West Bank and Gaza.
Bank Under Scrutiny
Arab Bank largely has withheld comment outside of court but has taken the position it was not wittingly part of the terrorist financing. It has acknowledged transferring close to $100 million to Palestinians for “humanitarian aid” but says it “abhors terrorism” and had no intention of subsidizing suicide bombers.
One strike against Arab Bank in the upcoming trial is its decision to withhold documents that the court ordered it to turn over related to customers such as Hamas and other terrorists and militant groups on the U.S. list of terrorist organizations.
Arab Bank claimed bank secrecy laws in Jordan, Lebanon and other countries bar it from turning over the material. But federal courts ruled the jury may infer guilt or wrongdoing from the bank’s failure to provide the documents.
Arab Bank has taken issue with a series of pretrial losses it has suffered in the case so far, claiming the court rulings are “inconsistent with controlling precedent as well as decisions of other district courts on key legal issues.”
Several hundred additional victims of terrorism have filed similar cases against Credit Lyonnais and NatWest, which also claim they conducted only routine banking activities not intended to promote terror.
Arab Bank is arguably the most prominent financial institution in Jordan, an important U.S. ally. This puts the U.S. government in the position of wanting to support the fight against terrorist financing but not wanting to disrupt an important international alliance.
Zarate says banks that do business with Arab Bank could be affected.
Did a prominent international bank provide support and services to Hamas?
“Banks with exposure and presence in the U.S. have to concern themselves with the activities and reputation of their correspondents,” says Zarate. “If Arab Bank loses the case, it could trigger further political, regulatory, and enforcement scrutiny from U.S. authorities.”
We contacted a number of top banks to ask what impact the case could have on their relationship with Arab Bank. Bank of America and Citi declined comment. JP Morgan, UBS and Wells Fargo didn’t respond. Deutsche Bank told us, “As standard global policy, the bank reserves the right to terminate any relationship with any entity when facts emerge supporting allegations they have violated the law.”
Jury selection for the case begins today.
This is a Daily Signal special feature.