Arab Bank chairman in terror-finance trial: Terrorism is bad for business

Billionaire head of region's largest bank explains why it would not touch terror financing; brother killed by terrorists.

By FRANK G. RUNYEON
September 9, 2014 13:26
Arab Bank trial

Hezbollah flags seen in front of Arab Bank building in Beirut. (photo credit: REUTERS)

In one of a historic terrorism-financing trial’s most dramatic moments, billionaire Arab Bank chairman Sabih al-Masri explained to a federal courtroom in New York that terrorism is bad for business.

While the court prevented Masri from directly answering whether the bank had financed terrorism, it was clear from his answers late on Monday, including mentioning terrorists killing of his brother, and from reported out of court statements, that he vehemently rejects any allegation of the bank financing terrorism.

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The rare testimony of such a senior bank executive followed three weeks of gripping proceedings against Arab Bank by 297 plaintiffs suing it for billions in damages relating to allegations of funding terrorism.

The plaintiffs allege that Arab Bank, practically Jordan’s sovereign bank and one of the largest in the Middle East with branches in 30 countries, facilitated massive transfers 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 and 2004.

The plaintiffs say Arab Bank knew the money related to terrorists and terrorist groups, and is thus civilly liable for wrongful death damages relating to the killing of their family members resulting from attacks carried out using the transferred funds.

Arab Bank has said there is a lack of proof that the funds contributed sufficiently to terrorist attacks and that the bank knew of any terrorist connection.

Masri’s testimony was clearly part of the bank’s effort to match the human face of the plaintiff’s terrorism victims with the human face of its pro-West, pro-peace, sophisticated chairman and, facing an uphill battle, to turn the case’s momentum back to its favor.

In one example showing his pro-West credentials, Masri explained how his company Astra, formerly Arab Supply and Trading Company, was the sole supplier of food to American forces during the Gulf War, and continued to supply US troops food during the conflicts in Afghanistan and Iraq.

He added that his family kept a residence in London and had acquired various foreign and European citizenships, partially to facilitate relocating after his family came under threat for his willingness to work with Israel on business deals.

Masri related that Arab Bank did not operate in the West Bank from 1967 to 1994, returning to the area upon Israel’s request at the height of the peace process to assist in rebuilding the area.

The bank chairman went on to explain that the second intifada that began in late 2000 was a financial mess for the bank and its employees, with “hope for peace shattered” and “killing everywhere.”

Trying to show his rejection of terrorism, he described suicide bombers as having “destroyed the opportunities for people,” and said that the bombers’ actions and Israel’s military responses combined to lead to villages being closed off and “many people lost their jobs.”

Besides, mentioning forcefully that his brother Zafer al-Masri, the mayor of Nablus, “was assassinated by a terrorist” in 1986, Masri said that his own compound in Saudi Arabia was the target of a 2003 terrorist attack where “four of my best friend’s sons, children, were killed.”

Objections by the plaintiffs kept Masri from answering if he believed Arab Bank supports terrorism and whether it would be better for the bank to have intifada or peace, on the grounds that he was not an expert on such issues.

Despite his senior position, owning 5 percent of Arab Bank and serving on its audit committee, the cross-examination by plaintiffs’ lawyer Tab Turner sought to establish that Masri was not an expert on the financial issues in dispute in the case, since he stayed above the fray of such details.

Turner unleashed a salvo of pointed questions regarding Masri’s previous deposition, including getting him to confirm that he throws finance journals in the trash because he does not care to read them, did not want to be on the bank’s audit committee and had no idea Arab Bank worked with the Saudi Committee for Support of the Al-Quds Intifada, one of the bank-client charities alleged to have terrorist connections.

Turner got Masri to confirm that he had never heard of the Saudi Committee before this trial.

“There was nothing ever in the reports” Masri said on this point.

He was only on the stand for around 90 minutes; the defense said that part of the reason for his short testimony was unfair judicial rulings preventing the bank from discussing its rationale for acting the way it did.

The referred to rulings relates to a major dispute in the case over sanctioning Arab Bank for refusing to turn over certain foreign banking records, with the court rejecting its explanation that Lebanese and Jordanian bank secrecy laws prevented it from doing so.

Masri discussed his college years at the University of Houston and the University of Texas, Austin, and that for parts of his life he had little money and portions of his family had come from modest backgrounds.

Meanwhile, following the recent completion of the case for the plaintiffs, the bank filed a Rule 50 motion asking the court to enter judgment in its favor, based on the argument that none of the evidence that the plaintiffs presented could possibly lead to victory.

At its root, the motion says the plaintiffs have failed to prove their case and “meet the demanding requirements of the Anti-Terrorism Act” that the lawsuit is based on.

Although the plaintiffs may have proved that certain transactions led to money being transferred to terrorists, the bank’s motion argues that “nothing in the routine transactions at issue proves any evil intention on the part of the bank’s employees, or any causal connection to the grave injuries at issue.”

More specifically, the bank’s motion argues that because of the complicated legal principles of causation, the plaintiffs cannot prove that absent the bank being used as a conduit for certain funds to terrorists, none of the 24 attacks would not have occurred or that they only happened because of the fund transfers.

The bank argues that no reasonable juror could conclude on the plaintiffs’ evidence that the bank had “an intent to harm someone” by providing the financial services it did or that the actions of transferring funds were themselves dangerous to human life.

The plaintiffs appeared unconcerned by the motion and expected the trial to continue.


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