After around a decade of waiting including a last ditch attempt to get the US government or Supreme Court to block the case, likely the most significant terror finance case ever to go to trial in US history started on Monday against Arab Bank.
One of the most powerful banks in the Middle East and essentially Jordan's sovereign bank to the extent that the Jordanian government implied that if the bank loses, its economy and the entire counter-terror cooperation with the US could fall apart, the stakes could not be higher.
The federal New York Judge in the case, Brian Cogan, showed strong control and piercing wit from the start, telling the sides when an evidentiary issue arose that they had about as much chance of mutually agreeing to a resolution as Israel and the Palestinians did of reaching a quick end to the 100 year conflict.
The case itself, which has been featured on CBS News's Sunday Morning program and followed regularly in many of the premier news outlets, involves allegations by 297 plaintiffs that Arab Bank facilitated massive transfer of funds to Hamas leaders and institutions, as well as to the families of imprisoned Hamas members and suicide bombers, via Saudi Arabia and Hezbollah's al-Shahid Foundation, mostly between 1998-2004 (though evidence may focus on 2001-2004.) 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 relating to the killing of their family members resulting from terror attacks perpetrated using the transferred funds.
Arab Bank has said there is a lack of proof the funds went to terrorists, that the funds contributed directly and sufficiently to terror attacks and that the bank had any knowledge of a connection to terror.
The issue Cogan satirically commented on, according to the bank's lawyer Shand Stephens, was on whether the bank could present to the jury a history of the Israeli-Palestinian conflict to defend itself against allegations that "if the bank didn’t exist, the attacks [against the plaintiffs] would not have happened." One of the lead plaintiffs' lawyers, Gary Osen, said he had "very serious concerns" about the presentation.
Asked by the judge which aspects were problematic, Osen said, "almost in their entirety," and Cogan added seemingly agitated that, "I've never seen anything like this in an opening statement.
Cogan also challenged the bank that if it really wanted to present the full history of conflict in the area, implying this was off-topic of the bombings in question, that it could start "in biblical times." He will likely rule on specific aspects of the presentation before opening statements on Thursday.
Other rulings the judge made, included pressing the plaintiffs that they must not allow their witnesses of terror attacks tell the jury their conclusions about who caused the attack, limiting their testimony only to what they witnessed with their own eyes.
When presented with a question for jurors about their race (Jewish jurors might be assumed to be pro-plaintiffs and Muslim jurors pro-defense), the judge waived it off as an irrelevant question.
Jury selection is due to be completed on Wednesday with opening statements starting Thursday.
A critical issue in the case which brought the US State Department, Justice Department and Treasury Department to loggerheads over what official US policy should be, is an April 2013 sanctions order imposed by a New York federal court which significantly penalized the bank for refusing to turnover key documents which the plaintiffs said they need to prove their case.
The bank had refused to turn over certain documents to the plaintiffs, saying it could incur criminal sanctions from Jordan and Lebanon for violating bank secrecy laws, but a lower US court rejected this rationale and ordered that a jury at trial could infer that the bank's refusal to turn over documents was like an admission of what the plaintiffs argued they would prove.
The US government in May took a middle ground saying that the Supreme Court should not intervene pretrial (a win for the plaintiffs), but harshly criticized the lower court for not fully considering the foreign policy consequences of disregarding Jordanian sovereign interests in the case.
There is also a very real chance of throwing out the case post-trial if those interests are ignored.
Judge Cogan essentially said he would instruct the jurors that they could draw conclusions about the bank's liability from it not providing certain records Gary Osen, one of the lead lawyers for the numerous plaintiffs remarked at the time: “Hopefully, we’ve cleared the last roadblock to a trial on the merits. Our clients have waited 10 years for this moment.”
Another critical issue in the case is what kind of a standard of proof will be applied to the bank which could set precedents for much greater responsibility in the future for massive banks in policing their wire transfers, including when they are mostly pass-through banks from correspondent banks where the transfer funds really originate.
Arab Bank has bristled at the idea that it was connected with terrorism or should be held responsible for fund transfers to persons who might later have been declared terrorists by the US, but regarding who, at the time funds were transferred to them, were not on the US OFAC watch-list.
It has asked how it can be held to a greater accountability standard than the US government, particularly when some funding sources in dispute had received transfers directly from parts of the US government and had been declared "terror free" by top US officials at the time.
Some of this evidence has been thrown out as to general, and Arab Bank faces some tough sells with some of the transfers it claims were made with no knowledge of wrongdoing at the time being made to infamous terror-connected persons like top Hamas leaders, Hamas "Prime Minister" Ismail Haniyeh, arch-terrorists commanders (now deceased) Saleh Shehada and Ahmed Jabari and Ahmed al-Muqadama, a Hamas founder.
But it will try to prove that evidence against it is looking back retrospectively and unfairly, while the plaintiffs will try to prove that much of the evidence and names were smoking guns that Arab Bank willfully ignored.
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