Legal Affairs: Awaiting the verdict

A New York jury in a blockbuster terrorism finance trial about to decide: Did Jordan’s largest bank know it was funding Hamas during the second intifada?

By FRANK G. RUNYEON
September 19, 2014 15:11
Moussa Abu Marzouk

Hamas political leader Musa Abu Marzouk (R) shakes hands with a Hamas militant as he visits the mourning tent of senior Hamas commander Mohammed Abu Shammala (seen in posters).. (photo credit: REUTERS)

 
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If former prime minister Ehud Olmert’s Holyland trial was the Israeli corruption trial of the century, the Arab Bank trial that has been taking place in a federal court in Brooklyn for the last five weeks could be the terrorism finance trial of the century.

The trial has a master villain, Hamas, which carried out the August 2001 Sbarro suicide bombing in Jerusalem, killing or wounding 130, and a range of horrid terrorist attacks during the second intifada.

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There are the victims, 297 plaintiffs who were wounded or are family members of those murdered in the 24 terrorist attacks from 1998-2004 financed via Saudi Arabia and Hezbollah’s al-Shahid Foundation, using the Jordanian bank as a conduit.

Also, there is a 10-year history of intense legal battles, including trying to get the bank’s “secret” client documents located in Jordan, Lebanon and the Palestinian areas.

The US Supreme Court has already weighed in once pretrial and may be asked to weigh in again post-trial, while the State, Justice and Treasury departments fought over whether the US government should accede to Jordan’s requests to intervene, which could have the effect of directly or indirectly killing the case.

Jordan implied to the Supreme Court that Arab Bank is so crucial, that a billion-dollar judgment that tanks the bank could lead to the country imploding and falling under Islamist control at worst, and force an end to crucial US-Jordan counter-terrorism cooperation at the very least.

Commentators have written that if Arab Bank is held liable for being a conduit for funds that eventually reached terrorists, the precedent could shake the international banking system to its foundations, as many major banks may be using their size and looking the other way to dabble in such transactions.



The central question is whether a 11-member jury of eight women and three men, with a majority appearing to be African-American or Hispanic, will find that Arab Bank knew or should have known that its account holders were using it to transfer “blood money” to Hamas for terrorist operations – or whether it checked for suspicious transactions as best it could, and simply missed them.

The plaintiffs’ advantages are clear.

In the big picture, the volume of funds transferred to Hamas or its fronts may be just too large for a jury to ignore, with the plaintiffs saying they proved the bank transferred more than $2.5 million to terrorists, after the US had already made the designation.

Plaintiffs say they proved that more than $32m. was transferred to proven Hamas fronts.

There’s little doubt that the plaintiffs’ presentation, led by lawyers Mark Werbner, Tab Turner and Gary Osen, has been more engaging and dramatic than the often more cerebral defense, led by Shand Stephens.

The plaintiffs have played the jury videos of children dressed up as Hamas leaders and suicide bombers, and bearded men joking about being terrorists and displayed bank records that seem to spell out “Hamas” and “martyr” right on the jurors’ flat screen monitors.

Also, the plaintiffs have had emotional declarations like “Who’s Who of Hamas were bank customers” and that the bank was Hamas’s “paymaster” providing financial “oxygen that feeds” terrorism.

In the unusual US system where juries of common people decide the case as opposed to judges, as in most countries, some of these less legal considerations often weigh heavily no matter how the judge tells the jurors how they should think about the case’s legal issues.

Possibly helpful to plaintiffs, but less one-sided, there is the question of the bank’s 2002- 03 annual reports that referred to Israel as the “occupying enemy,” and annual calendars of a political nature that seem to belie the bank’s claims of neutrality, suggesting it may have had a mental state sympathetic to looking the other way on terrorist funding.

The bank also has clear advantages.

It has made a convincing case that its business was hammered by the second intifada and by terrorist incidents in that period.

Even if some bank executives harbored hostility to Israel, it may be hard to convince jurors that the very westernized cosmopolitan bank elite executives had “intent” – being purposely ready to endanger the bank’s existence by getting involved in terrorist financing.

The vast majority of the transactions, including some of the “worst” transactions that the bank is accused of letting through, such as to Haniyeh and arch terrorist Shehade, went through when even those men were not on the US watch list, even if some intelligence agencies were already targeting the men.

The bank’s mantra that it need not be an intelligence agency, that the best it can do is check US watch lists and that many of the Hamas fronts that it paid funds to, US Agency for International Development, the EU and many other prominent banks were still paying funds to at the time, all put it in a reasonable light.

Further, the bank wins if it just plays good enough defense and it may have played effectively against the plaintiffs’ claims that it approved transactions going to families of suicide bombers with bank documents seemingly noting suicide bombing as the cause of death.

The bank called attention to different interpretations of Arabic terms referring to “martyrs” or “martyrdom operations,” with possible interpretations being nonviolent, such that bank employees may not have known that the notations signified terrorism.

So yes the bank has strengths and can strongly legally rebut the majority of “terrorism transactions,” since most of the terrorists were not on the US Office of Foreign Assets Control (OFAC) watch list at the time they received funds.

But its bigger legal problem may be that, with at least a small number of transfers, some terrorists who received funds were on the US watch lists, including transfers to high-profile Hamas leaders like Osama Hamdan, Sheikh Ahmed Yassin, Mousa Abu-Marzook and the Hamas front Interpal.

There are also two major legal issues which hung over the trial and which the jury must tangle with: a sanctions order and causation.

An April 2013, the case’s pretrial Judge Nina Gershon issued a sanctions order, punished the bank for failing to produce certain bank documents from its Jordan and Lebanon offices out of fear of violating those countries bank secrecy laws, protecting customers’ privacy.

The order means that when the trial ends on Thursday, the judge will instruct the jury essentially that it “may” infer from the bank’s not producing the documents that those documents would have proved the plaintiffs’ arguments that the bank knew or should have known it was being used as a conduit for terror financing.

The word “may” is supposed to free the jury to rule for the bank, but that instruction is an awfully big hint, and there is no doubt that the bank, if it loses, would argue on appeal that the hint caused it improper prejudice.

On defining causation, the plaintiffs got an edge over the bank with the judge instructing the jury that to show the bank’s alleged terror financing had a hand in the 24 terror attacks, they need only find that the bank’s conduct was a “reasonably foreseeable” cause of the injuries to the victims.

The bank would have preferred that causation be closer to the plaintiffs having to prove that “but for” the bank’s conduct, the terror attacks would not have occurred, a much higher standard.

The jury instruction and the earlier summary judgment rulings on causation could be ripe for a bank appeal.

In one of the trial’s more dramatic moments, Palestinian finance minister and former bank chief executive Shuki Bishara admitted that he had personally approved paying Hamdan $8,000 in 2005. Bishara had a range of explanations about why. He said that he tried for months to close the account or find another solution by seeking advice from the Lebanese authorities, but received no answer.

He said that he was obligated under Lebanese law to close the account and return the funds to the original owner.

The bank has added that even if Hamdan was on the US watch list when the funds were sent back to him, when the account was opened he was not yet on the watch list.

With Yassin and Marzook, the bank says that different spellings of their names from the accounts to the watch lists lead to their terror identities not being caught.

With Interpal, the bank said that a lower down employee mistook an approval on a currency conversion issue as a final approval for the transaction including overriding the watch list’s hold on the transaction.

Will the jury accept these explanations? It certainly could.

But in light of the larger context, the jury might find that once the bank knew Hamdan was a terrorist, it had no obligation to send the funds back to him, and may view any fear of Lebanese contract law in the face of criminal-terrorist issues as a poor defense.

On a similar note, coming back to Haniyeh and Shehade, will the jury accept that bank employees really did not know who they were just because they not on the OFAC list? The question is sharpened since Tayseer Sadeq, the bank’s chief compliance officer for the Palestinian areas, admitted that everyone at the bank knew who prominent Hamas leaders were such as Yassin.

The bank has a real shot to pull out a win and if a cerebral judge was deciding, it might even have a better shot.

Still when taking into account the overall picture, 9/11 and Islamic State images hanging over the common New Yorker juror (the Brooklyn courthouse is directly across from where the Twin Towers stood) and the plaintiffs’ edges on the sanctions and causation issue, the plaintiffs likely have an edge to get an unprecedented historic win against a powerhouse bank.

But the jury may not have the final say.

The case would likely go to the US Supreme Court, and with Islamic State threatening Jordan and the rest of the Middle East, the US government may shift its position to blocking the case, just as Israel shifted its position from cooperation to obstruction in the massive Bank of China terrorism finance case, when changes happened geopolitically with Israel-China relations.

Regardless of how that plays out, the world of banking will be a different place when the jury reaches its expected verdict.

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