China may have covered up 2005 meeting to prevent Israeli testimony in terror-finance case

NY court transcript: Evidence Bank of China pushed by Beijing to deny it had been informed it was being used to fund terror.

July 24, 2013 01:50
3 minute read.
Chinese 100 yuan banknotes are seen in this picture illustration taken in Beijing July 11, 2013.

China (yen) . (photo credit: REUTERS/Jason Lee)


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There is evidence the government of China tried to cover up a 2005 meeting it had with top-Israeli officials about terror financing passing through the Bank of China, according to a court transcript The Jerusalem Post obtained on Tuesday.

The court transcript from a hearing on Friday before US District Court Judge Shira Scheindlin in Manhattan indicated that at some later point, the Bank of China was in possession of an internal Chinese government letter recommending that the various agencies involved in the issue deny that the 2005 meeting had occurred.

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The implied legal purpose of such a denial would be for the Bank of China to deny that the Chinese government or the bank had any prior notice from Israel, other than the lawsuit itself, that the bank was being used as a money-laundering hub for terrorist financing for Islamic Jihad and Hamas.

If such a denial could be pulled off, then even if the bank was being used by Islamic Jihad and Hamas, it could be difficult or impossible to prove the bank had any criminal intent.

Another reason the bank and China would have wanted to deny the meeting’s occurrence would be to block Israeli intelligence official Uzi Shaya from testifying in the case about what happened at the meeting.

Previously, Shurat HaDin – Israel Law Center head Nitsana Dershan-Leitner told the Post that she could be compelled by the court to testify that the government broke its promise to offer Shaya (she referred to him only as the witness, but his name appears in the public record), as the key witness, to testify about having put China and the bank on notice at the 2005 meeting.

Darshan-Leitner had spoken to the Post about the various scenarios that could ensue in the aftermath of recent reports that Prime Minister Binyamin Netanyahu has prevented Shaya from testifying in the case, under threat from China that otherwise it would cancel his recent visit there.

If there was no meeting, then the bank could also argue for the irrelevance of Shaya’s testimony, on top of any alleged attempts by the Chinese government to muscle the Israeli government into preventing him from participating in the case.

At the hearing, Bank of China lawyer Mitchell Berger still protested that no one from the bank was present at the meeting and that the bank had no record of the meeting.

Berger and lawyer Lanier Saperstein were forced, however, to admit that the 2005 meeting took place, whether a bank representative attended or not.

Also, the lawyers appeared uncomfortable explaining the letter suggesting that the meeting’s occurrence be denied and the fact exploited by the plaintiff’s lawyer Lee Wolosky – that the Chinese government is the majority shareholder of the bank.

Based on the majority ownership, arguments could be made that if China was on notice, then the bank was also on notice, or should have been.

The bank’s lawyers did make an attempt to respond, though, arguing that Shaya’s testimony might make no difference if there was no proof that the bank had notice of the meeting or its content.

The bank’s lawyers also said that maybe the Israeli government was withholding Shaya’s testimony because it believed his testimony would be inaccurate – though the court appeared to reject this out of hand.

The central question of whether Shaya will testify is being reviewed by the government, according to an official letter response to the court from July 12 by deputy director of the international department of the State Attorney’s Office, Yitzhak Blum.

The court expressed frustration that the letter did not give any deadline for an answer, and indicated it would be responding to Blum’s letter by requesting a deadline.

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