Why the Arab Bank terror-finance trial matters

September 19, 2014

Last week, on the evening of Sept. 11, a lawyer named Mark Werbner stood outside his hotel in Brooklyn and looked across the East River at the blue lights commemorating the collapse of the World Trade Center in 2001. Werbner, who is from Dallas, was in New York because he represents American victims of Hamas bombings and shootings during the second Palestinian Intifada. Since early August, he and his co-counsel have been trying the victims’ claims against Jordan’s Arab Bank, which they accuse of financing the Hamas terror operations. As he looked at the blue lights, Werbner told jurors Thursday during closing arguments in the Arab Bank trial, he stepped back and asked himself whether the 10 years of work he’d put into the case had accomplished anything.

“What am I doing here? What difference will it make?” he told jurors. “You know what’s going on in the world since then. It’s not any better. You know what we’re facing.”

I’ve asked myself the same question, after watching portions of the Arab Bank trial over the past six weeks. For all of the dogged investigation, numbing research and considerable expense that the victims’ lawyers have devoted to their case against Arab Bank, militants – including those from Hamas – are still finding ways to finance operations targeting civilians. Even as lawyers in this case argued in whispered sidebars in an air-conditioned courtroom in Brooklyn over the admission of pieces of evidence from an uprising that ended a decade ago, the Islamic State was putting out videos of its merciless beheadings of American journalists and a British aid worker. The 11 jurors who’ve endured long weeks of a multilingual, document-intensive trial must also have wondered: Can private litigation against a bank prevent terrorism?

The four lawyers who spoke Thursday for the plaintiffs in the Arab Bank case assured them that it can – that the message they send with their verdict will force international banks to do more than check wire transfers against terrorism blacklists. If jurors find Arab Bank liable for processing about $73 million that allegedly propped up Hamas operations in the Second Intifada, the lawyers said, banks around the world will be on notice that they’re responsible for actively policing against financing terror.

“We all have a role to play, to prevent terrorism, every one of us,” said Michael Elsner of Motley Rice. “We are interlinked, interdependent. We need to be together to stop this. It just can’t be that we can only act when a government says, ‘You have to act now.’ It can’t be that we only do it when the computer gives us an alert.”

Closing arguments by the bank’s lawyer, Shand Stephens of DLA Piper, highlighted the fundamental choice for jurors in this case, the first trial of private claims against a bank under the U.S. Anti-Terrorism Act. Arab Bank’s defense throughout has been that it used the same money-laundering-prevention processes as every other international financial institution and complied with international banking standards by checking wire transfers against government terror blacklists. As Stephens repeated Thursday, only one of the accused Hamas leaders who held accounts at Arab Bank was designated as a terrorist by the U.S. government at the time of the Second Intifada. (Another was subsequently added to the blacklist published by the U.S. Office of Foreign Assets Control, or OFAC.) None of the charities that supposedly operated as a Hamas front was designated when Arab Bank processed transactions for it. None of the beneficiaries who received cash payments at Arab Bank branches from the Saudi Committee for Support of the Intifada al Quds appeared on the U.S. blacklist.

Stephens told jurors that no bank should be in the business of making ad hoc decisions about who’s a terrorist. “Governments figure out who is supposed to be on the list,” he said. “You wouldn’t want it any other way. You wouldn’t want to have Google or Facebook or Walmart or Target or Citibank or Bank of America or TD Bank or Arab Bank deciding who belongs on a terror list.” Some of the very wire transfers at the heart of the plaintiffs’ case against Arab Bank, Stephens said, were processed not just through Arab Bank but also through U.S. banks such as Bank of New York Mellon and Washington Mutual.

That’s the way things should work, Stephens said. Private institutions don’t have the power to “strangle you financially,” he told jurors. “The government is supposed to designate these people and then the banks react. The banks don’t designate people as criminals. You don’t want them to and neither do I.”

Victims’ lawyer Tab Turner, an Arkansas products liability lawyer who talked to jurors like a really successful high school football coach addressing his team, mocked the bank’s “OFAC this, OFAC that” defense. Under U.S. antiterror law, he said, banks are responsible when they knowingly provide material support to a terror group or to people acting on behalf of the group. There’s nothing in the law that says banks only have to pay attention when wire transfers involve people or groups who are on official blacklists. Arab Bank officials were on the ground at the bank’s branches in the Palestinian territories when the Intifada was under way, he said. They opened accounts for recognized Hamas leaders and saw documents directing Saudi Committee money to the families of suicide bombers. Wire transfers may seem like bytes of data flowing anonymously, Turner said, but real people at Arab Bank saw how Hamas was using money their bank processed.

So it’s not enough, the plaintiffs said, that the bank used compliance software to check for OFAC designations. That’s not the letter or spirit of the law designed to protect Americans from acts of terror. “We’re trying to figure out whether you knew, whether you gave money to terrorists, not whether your software worked or didn’t work,” Elsner said.

The last argument of the day was from plaintiffs lawyer Gary Osen, who spearheaded the case but hasn’t been a big presence before the jury. (Osen has a very understated style, especially compared to Turner and Werbner.) Osen reminded jurors of the first witness they’d heard, a New Jersey man paralyzed in a Hamas bus bombing, who testified via a video deposition because he died in 2010 from complications of his injuries. “Steve Averbach was the bravest man I ever met, and every day of his life after that bombing was a challenge,” Osen told jurors. “He hoped that this lawsuit would do some good, that it would help stop this process of paying the families of suicide bombers. And all of my colleagues here worked for the last 10 years to hold these people accountable. But in the end, Steve couldn’t do the job and we can’t do the job  You, and you alone, can finish the job Steve started.”

Now it’s up the jury, eight men and three women in Brooklyn, to tell banks around the world what they need to do to choke off terrorism financing. That’s an immense responsibility. And that’s why terror-finance litigation matters.

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