Following the Bank of China terror funding case: A dizzying experience

Lawsuits are against the bank for alleged connections with the financing of Hamas, and Islamic Jihad.

Netanyahu in China (photo credit: Avi Ohayon, GPO)
Netanyahu in China
(photo credit: Avi Ohayon, GPO)
Observers might have thought that Shurat Hadin and the Wultz family’s lawsuits against the Bank of China for alleged connections with the financing of Hamas and Islamic Jihad terrorist attacks could not get any more complicated, but they would be wrong.
The lawsuits are in connection to attacks in Israel, against Americans, between 2003 and 2008. Their premise is unusual and involves actors in at least four countries – 22 American victims’ families (partially led by an Israeli NGO) plus the Wultz family (on behalf of their murdered son Daniel) – suing a Chinese bank over attacks perpetrated by terrorists from the Palestinian areas and elsewhere.
Within that legal war, the current bizarre and heated battle is over whether former Israeli government agent Uzi Shaya will testify on behalf of the terror victims’ families against the bank.
He had been expected to testify to facts already specified in a court affidavit, by former Israeli government agent Shlomo Matalon, that Israel gave the bank notice in 2005 of certain clients’ accounts being used by terror groups to launder funds for terror operations.
The Israeli government, which Shurat Hadin and the Wultz family say had originally guaranteed them it would allow Shaya to testify and provide various classified documentary proof for their cases, is now trying to prevent Shaya, who wants to testify, from doing so – it says this is due to national security.
Though the lineup of who is fighting over what is different in each court, a range of Shurat Hadin, the Wultz, Israel and the bank’s representatives are now fighting over whether Shaya will testify and who will be making that decision. The fight is before a US Federal Court in Washington DC, another US Federal Court in New York and before the Israeli High Court of Justice.
There is much debate over the conditions of Shaya’s testimony, but it would be part of the New York case.
There could also be more background added to this dizzying case, but the general situation is that Israel would prefer to fight out the issue over whether Shaya will testify in the DC court, while Shurat Hadin prefers the New York and Israeli courts. The Wultz’s are arguing before the DC court and have not taken a public stance on fighting over the issue elsewhere.
In legal pleadings on the issue, Shurat Hadin says the New York court is better placed to decide than the DC court, since most of the proceedings have taken place there.
However, underneath that argument there might be more as Judge Shira Scheindlin in New York has already made it explicitly or implicitly clear (depending on your point of view) that she wants to hear from Shaya to get to the truth.
Shurat Hadin believes this could make her lean toward ordering Israel to let Shaya testify – or face contempt charges from a US court.
Shurat Hadin is pressuring Israel, on a second front, in the Israeli courts to get documents that overlap with the issues that Shaya’s testimony could help prove for its clients.
It appears to believe that Israeli judges, who are more directly impacted by Hamas and Islamic Jihad terror, might be the most sympathetic to forcing their own government to help the terror victims’ families with evidentiary documents, even those that the state says it cannot reveal because of national security.
If Shurat Hadin succeeded in getting the High Court of Justice to compel the state to produce the documents, Israel would actually have to comply, whereas with a US court it could decide to face contempt charges, however problematic that would be diplomatically.
If Israel was ordered to produce the documents by its own courts Shurat Hadin could argue to the US courts that Israel’s main arguments for blocking Shaya from testifying, endangering national security and protecting its sovereignty, were superseded and blown out of the water.
But Israel is trying to turn that argument on its head, arguing to the High Court that it would be premature for it to jump into this international legal mess, which has until now been only an American courts story.
The state filed an opposition to Shurat Hadin’s petition to compel it to comply with its legal assistance request – producing documents needed in a foreign (US) court.
In the opposition it said that the High Court should let the DC court rule on the Shaya issue, which subsumes the documents issue as well, before it says anything about the documents issue alone – the Israeli courts are only being asked to decide on documents, not on whether Shaya will testify.
Israel appears to prefer that the DC Court make the decision either because of Scheindlin’s pronouncements or possibly because a DC court may be more sensitive to aggravating diplomatic tension with a foreign ally like Israel.
Following the case can feel like a game of musical chairs on steroids, but with all three courts engaged in the issue, one way or another, the issue of Shaya’s testimony will be decided in the coming months.