The suicide bomber who boarded the crowded Number 2 bus in Jerusalem in August 2003 killed 23 people including Tehilla Nathansen, a three-year-old whose family was returning from prayers at the Wailing Wall.
Eleven years later, in another August dominated by violence, Tehilla’s family and about 300 victims of attacks in Israel and their relatives seek a verdict that may help recoup hundreds of millions of dollars from a bank that they say counted terrorists among its customers.
Arab Bank Plc, Jordan’s largest lender faces a trial set for today on claims brought under the Anti-Terrorism Act, which lets U.S. citizens who are victims of terrorism sue supporters of attacks. Nathansen and her mother, Chana Nathansen who was injured in the bus bombing, held U.S. and Israeli citizenships.
The plaintiffs’ theory in the case is “fairly sweeping,” said David Cole, a Georgetown University professor of law and public policy. “It’s part of a broader pattern, in which, in the name of fighting terrorism, Congress and the courts have extended liability far beyond the terrorists themselves.”
The case highlights the ways banks can play a role in funding terrorist groups and the extent to which they can be held responsible for monitoring their customers. Credit Lyonnais SA and Bank of China Ltd. are facing similar pending cases in the U.S. alleging they served as conduits for terrorism financing. The trial in federal court in Brooklyn, New York, is scheduled to begin today with jury selection.
Arab Bank, established in Jerusalem in 1930 and now based in Amman, Jordan, is accused of providing banking and other services which allowed Hamas to carry out 24 attacks in Israel and the Palestinian territories from 2001 to 2004. Hamas, the Palestinian militant group was designated a terrorist organization in 1997 by the U.S. The bank, which has denied wrongdoing, has about 600 branches worldwide, including an office in Manhattan and a presence in Palestinian territories.
“These groups can’t operate unless money is flowing into them,” said Jeffrey F. Addicott, director of the Center for Terrorism Law at St. Mary’s University in San Antonio, Texas. “I think this is the new wave, if you want to fight terrorism. It’s finding ways to cripple them financially.”
Arab Bank is accused in the lawsuit of providing financial services to terror operatives and charities controlled by Hamas and acting as “paymaster” for the Saudi Committee for the Support of Intifada Al Quds, which the plaintiffs say provided stipends of more than $5,000 to families of suicide bombers and other terrorists.
“This type of support is critical to Hamas’s efforts to win the hearts and minds of the Palestinian people,” the families said in the complaint. Providing such benefits “would have been substantially more difficult’ if not for the help of the bank, the families said in the 2004 complaint.
Arab Bank said it didn’t support the attacks and complied with relevant banking regulations.
The case originally encompassed about twice as many attacks and thousands of plaintiffs, including many who weren’t U.S. citizens. Claims of non-citizens were thrown out and the trial was tailored to include only attacks alleged to have involved Hamas rather than other groups. After a trial of as long as two months, a jury will decide whether the bank is liable for the incidents. Damages would be determined through later proceedings.
A verdict for the plaintiffs would ‘‘undermine” automated compliance systems used by the global banking industry to processes trillions of dollars in transfers each day, and “create vast uncertainty and risk in the international finance system,” the bank said in a statement.
“Arab Bank provided routine banking services” and “had no intention of providing support to Hamas or any other known terrorist organization,” the bank said.
Arab Bank refused to provide some customer records to plaintiffs in the case, arguing that it couldn’t supply the information without violating criminal laws of Jordan, Lebanon and the Palestinian territories. A federal judge ruled that jurors can be told to infer from the bank’s failure to produce the information that it intentionally provided services to terrorists groups, giving plaintiffs a potential edge in proving their case.
The U.S. Supreme Court in June declined to take up the bank’s appeal of the judge’s order, which also limited the defenses the bank can use. In a brief to the court, the Obama administration said the case wasn’t worth the high court’s review even though it said a federal appeals court’s ruling allowing the sanctions was flawed. The U.S. called the bank “a constructive partner with the United States in working to prevent terrorist financing.”
Initially overseen by U.S. District Judge Nina Gershon, the case was transferred to U.S. District Judge Brian Cogan in July 2013, about three years after she issued the sanctions against the bank. No explanation for the change was given in the court record.
In 2012, U.S. District Judge Jack Weinstein, also in federal court in Brooklyn, dismissed a similar case against the bank brought by Mati Gill, a former Israeli public security official, who was injured in a 2008 gunfire attack which allegedly involved Hamas. The judge said Gill failed to show the bank directly caused the attack.
The case is Linde v. Arab Bank Plc, 04-cv-02799, U.S. District Court, Eastern District of New York (Brooklyn).