Wednesday, April 23, 2014

23-Apr-14: Litigation against bank accused of funding terrorism is "splitting" US government

US Supreme Court, Washington [Image Source]
The Jerusalem Post has a report tonight ["US Solicitor General to tell Supreme Court stance on Arab Bank terror financing case"] authored by Yonah Jeremy Bob, focusing on a massive private law action in which multiple plaintiffs are suing for civil damages the Kingdom of Jordan's largest commercial enterprise, Arab Bank. It's a cluster of cases that has been working its way through the US court system for a decade. The New York Times recently called it "a multibillion-dollar lawsuit [that] has provoked a significant split in the Obama administration".

What attracted Bob's attention is the prospect of the US Solicitor General filing an opinion with the US Supreme Court in the next few weeks, stating the US government's position on the case, and in effect
refereeing a dispute between the US State Department on one side, and the US Justice and Treasury Departments on the other side, of how to handle the case. The case itself, which has been featured on CBS News's Sunday Morning program, involves allegations that Arab Bank facilitated massive transfer of funds to Hamas leaders and institutions... The plaintiffs allege that Arab Bank knew that the funds related to terrorists and terror groups, and is thus, civilly liable for wrongful death damages resulting from terror attacks perpetrated using the transferred funds. [Jerusalem Post today]
The court asked the US government to say how it views a ruling by the trial court that imposed penalties on Arab Bank for non-production of certain documents. Arab Bank, the defendant in these actions, has claimed it is unable to comply with court orders to produce those documents because of bank secrecy laws in certain Arab states. Arab Bank wants the US Supreme Court to reverse the ruling.

Logo of Arab Bank Group
The JPost article says the Departments of Justice and the Treasury have supported the trial court's tough line with Arab Bank on the non-production issue. They want the US Supreme Court to stay out of the case. The State Department is said to want the court to intervene on Arab Bank's behalf for foreign policy reasons.
The Government of Jordan itself has taken the unusual step of filing its own legal brief in the case in support of the bank's defense and in support of the US Supreme Court interceding on the bank's behalf. Jordan's brief cited alleged disastrous consequences to the whole country, citing statistics that the bank accounts for as high as one-third of Jordan's stock exchange and 15% of all pension funds, if the bank is hit with a damages award which could be in the billions of dollars. Jordan also said that the Palestinian Authority could collapse as Arab Bank is one of the few institutions providing financial services in the Palestinian areas. It also implied that a major blow to Arab Bank could undermine Jordanian cooperation in the fight against terror, in the use of Jordan for a base of some military operations and in Jordan's ability to be a stabilizing factor regarding the Syrian civil war.  [Jerusalem Post today]
The article says a letter has been sent to President Barack Obama on behalf of the plaintiffs decrying the notion that
"any part of the United States government could possibly line up against US victims of terror and instead support an institution" accused of transferring funds to terrorists. The plaintiffs' letter to Obama also said that "siding with Arab Bank now would not only be a slap in the face of every American terror victim" but it would also "set a poisonous precedent" and "shield terrorists' financial information" from the US courts... [Jerusalem Post]
Jonathan Tobin, writing in Commentary Magazine earlier this month, fiercely criticizes what he describes as the State Department position:
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... 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... 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...  ["State Dept. Sides with Hamas Funders", Commentary, April 2, 2014]
A US law commentary publication quotes one of the counsel for the plaintiffs:
"What we want the government to do is permit the court case to proceed the way every other case proceeds in U.S. courts. That’s really in a nutshell what we’d like to do.”
Subject to what the Supreme Court says, the trial is set to get started in August 2014.

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