From American Lawyer: Litigation Daily
by Michael Goldhaber
author of upcoming book on Chevron v Donzinger case, Crude Awakening,
on Amazon http://www.amazon.com/dp/B00MR1SKWA
Sheikh Ahmed Yassin loomed over a Brooklyn courtroom last week like
the Dark Sith Lord of the Middle East. Jurors stared at a grainy
blow-up of the Hamas founder's glowering face, four feet high and about
that far from the jury box, his full, wrinkled beard and eyebrows
framing a fixed frown and pouchy eyes.
It was the opening of
the world's first terror finance trial,
Linde v. Arab Bank.
Over the next two months, jurors from East New York, Crown Heights and
Canarsie will get to pass judgment on events that happened half a
generation ago in Tel Aviv, Jerusalem and Ramallah. The man who would
sway them is America's king of rollover vehicle verdicts, Tab Turner,
originally of Arkadelphia, Ark.
As the trial kicked off on
Thursday, Turner brought the 11 Brooklyn jurors back to a crisp sunny
morning more than 13 years ago, a third of the way around the globe. On
March 28, 2001, a Hamas suicide bomber walked down the street from his
home and blew up two schoolchildren and injured four others—including a
teenage boy from Long Island who happened to be in the wrong place at
the wrong time—at a gas station near the Israeli town of Kfar Saba.
Turner
turned toward the defense table and declared: "The fuel for this man's
organization is sitting right across the room—Arab Bank." He told the
jury that Jordan's dominant financial institution, which has a Manhattan
branch, provided banking services for Hamas. And much of the money that
Arab Bank processed to organize these attacks, he said, "flowed right
down the middle of Madison Avenue." Turner promised to prove it all.
"What we have been able to assemble," he said, "is devastating."
The
man who assembled much of the proof, and hired Turner to present it, is
a shy misplaced historian named Gary Osen. Osen finished his dual
degrees in law and history at George Washington University in 1993. He
wrote his master's thesis on America's undeclared naval warfare of 1940,
and he was the first to unearth Franklin Roosevelt's shoot-on-sight
orders. "I like to be the first to see documents," he says.
On the
day after the attacks of Sept 11, 2001, Osen learned of a New Jersey
neighbor whose husband was killed at the World Trade Center and needed
legal advice. Osen was already an expert on historical reparations for
Holocaust victims—a passion developed with his father, Max, who fled
Germany as a Jewish child in 1937 and returned as an American liberator
in 1945.
As Osen researched Saudi financing of al-Qaida, he became
increasingly convinced that there were cases to be brought related to
the financing of Hamas and the ongoing Palestinian intifada. In April
2002, the Saudi Committee for the Support of the Intifada al Quds held a
telethon to raise money (which it says was strictly humanitarian). The
same month, in the wake of a bombing that killed 30 at the Park Hotel in
Netanya, the Israeli military captured records in the West Bank that
allegedly linked Arab Bank with Hamas. "I kept wondering: How does that
actually work?" says Osen. "How does the bank know who to pay?"
In
summer 2004, Osen gathered several U.S. victims of the intifada and
filed the first case against Arab Bank under the U.S. Anti-Terrorism
Act. The law held several advantages over the better-known Alien Tort
Statute, which was then in vogue among international human rights
lawyers. The ATA offered treble damages and attorney fees, and Osen
perceived helpful language in its text on material support, knowledge,
and causation (just how helpful remains to be seen). And because the
antiterror statute was expressly designed for U.S. plaintiffs who are
hurt overseas, it sidesteps any litigation over the extraterritorial
application of U.S. laws—the issue that virtually killed the corporate
alien tort at the U.S. Supreme Court last year in Kiobel v. Royal Dutch Petroleum.
Pursuing
the more direct but less fashionable route, Osen has come to spearhead
four of the seven Anti-Terrorism Act cases known to be active in the
U.S. courts. [
See chart: The Terror Docket.] In
the Arab Bank case, and in litigation against Chiquita Brands
International Inc., the alien tort plaintiffs have been sidelined after
Kiobel, leaving Osen to occupy the field. Whether through luck or wisdom, he has avoided a generation-long blind alley.
The Anti-Terrorism Act is alive. Linde v. Arab Bank will show whether it's a viable way to hold alleged funders of terror accountable.
As
openings continued in Brooklyn beside the giant poster of Sheikh
Yassin, Osen cocounsel Mark Werbner proclaimed: "Money is the oxygen
that feeds this kind of terrorism." According to Michael Elsner, who
delivered the plaintiffs' third presentation on Thursday, the Saudi
Committee funneled $35 million through Arab Bank to casualties or
prisoners of the intifada—including $5,300 to the family of each
"martyr." (Arab Bank says that included any Palestinian killed in the
intifada, and not just suicide bombers.)
Elsner told the jury his
team would prove payments to the families of 24 suicide bombers and
about 150 operatives. Werbner promised to show transfers of $2.5 million
to 11 designated terrorists. As a preview, Elsner flashed on the
courtroom screens a bank record showing a $5,300 payment from the Saudi
committee to the father of Sa'id al-Hutari, who killed 21 youths waiting
outside a disco in the Dolphinarium district of Tel Aviv on June 1,
2001. Turner showed a $60,000 payment to Sheikh Yassin, processed by
Arab Bank two days earlier.
"What did the bank know and when did
they know it?" asked Werbner. He said an Arab Bank witness would testify
that he never noticed a notation marked on a bank record—Amaliya Istishhadiya—meaning
"suicide bomber." Another Arab Bank witness, Elsner said, would testify
that he didn't look at a column on a wire transfer listing the
deceased's cause of death as suicide bombing. Amaliya Istishhadiya, Werbner kept intoning. "They knew full well," said Tab Turner.
Hamas
hosted hero's funerals for suicide bombers, sometimes hung celebratory
posters outside Arab Bank branches and held parades down Main Street
near Arab Bank branches, the plaintiffs' lawyers claimed. Arab Bank
briefly required employees to donate 5 percent of their salaries to
support the intifada, they added. In the bank's 2003 annual report,
then-chair Abdul Majid Shoman used language that, to Werbner, smacked of
a "political military manifesto." Shoman told shareholders: "Our
operations in Palestine suffered from harsh conditions due to the
continued violence and injustices of the occupying enemy." (Arab Bank
says Shoman was speaking of the Israeli military, not civilians.)
The
Saudi Committee would literally run ads in the top Palestinian
newspapers directing the families of listed martyrs to go to the nearest
Arab Bank branch to receive their payments, Elsner said. In February
2002, Al Hayat ran a near-full page ad requesting that "the relatives of
the martyrs, whose name hereby follow … head for the Arab Bank branches
in their places of residence in order to receive the 10th payment from
the honorable Saudi Committee—a sum of 5,316.06 USD for each family." Amaliya Istishhadiya, Werbner kept intoning. "They knew full well," said Tab Turner.
Shand
Stephens of DLA Piper opened for Arab Bank with a photo of the bank's
Amman headquarters. But because a bank is "really made of people," and
not of glass, concrete and steel, he spent more time on a slide of 15
Arab men in suits—speaking of the bank's executives with a tone of pride
and affection.
Arab Bank's leaders have been victims of terror
themselves, Stephens said. Former Lebanese prime minister Rafic Hariri,
whose family remains the bank's largest investor, was assassinated in
2005. The brother of current Arab Bank chairman Sabih Al-Masri was
assassinated in 1985, allegedly because he cooperated with Israel while
serving as mayor of Nablus. Al-Masri also suffered a bombing at his
Saudi residential compound and at the Grand Hyatt hotel he owns in
Amman. The bank's head in the Palestinian territories, Shukry Bishara,
ate at a Sbarro pizzeria that was bombed. Bishara's daughters attended a
Lycée Francais steps away from another bombing.
Shand Stephens
flashed on the screen the iconic photo of Bill Clinton, Yitzchak Rabin
and Yassir Arafat from the Oslo peace accord of 1994. That was the
moment when Arab Bank returned to the Palestinian territories. Bishara
returned personally, Stephens said, because "he thought it was a great
thing both for Arab Bank and actually for the peace process." After all,
Stephens said, Arab Bank is helping to ensure that there is a viable
local economy to build on when peace finally comes.
(Osen
responded in an interview: "This lawsuit is not intended, nor will it
undermine, economic development in the Palestinian territories. This
lawsuit is not about politics. We stand for the proposition that
deliberately targeting civilians is simply never justified.")
Stephens
spent the lion's share of his 90 minutes arguing that Arab Bank did
exactly what it was supposed to do as a bank. He explained how the U.S.
State Department, Treasury Department, and White House compose lists of
designated terrorists that are pooled to form the Office of Foreign
Assets Control (OFAC) watch list. "In short," he said, "it's the
government who decides who the criminals are." You take the list, put it
in the computer and then rely on that to make sure you're not financing
terrorists, he said. "This is the way, by the way, that banking works."
Then
Stephens stepped in a no-go zone. "There's no evidence a single penny
was spent on terror," he told the jury. U.S. District Judge Brian Cogan
struck the statement from the record. "There are rulings," said the
judge sternly.
Cogan was referring to sanctions issued in 2010 by
his predecessor on the case, Nina Gershon—a huge pretrial victory for
the plaintiffs that Arab Bank has failed for four years to overturn.
Because Gershon found that Arab Bank did not cooperate in discovery of
its Middle Eastern bank records, she ruled that the jury will be
permitted to infer that Arab Bank served terrorists knowingly—and Arab
Bank is precluded from claiming that it did not.
Arab Bank has
protested that the sanctions virtually doom it to a show trial. "In
practical effect, [these sanctions] go a long way toward directing a
liability verdict against the bank," its lawyers complained in objecting
motions. "The jury, likely to be emotionally charged by descriptions of
heinous acts … will be allowed (in practice, encouraged) to infer that
the bank had the [needed] intent." Such "draconian sanctions," the bank
asserted, "effectively invite the jury to find liability."
Legally,
the bank argued
that the sanctions offended comity and due process, and forced it into
the Hobson's choice of violating U.S. discovery rules or Middle Eastern
privacy laws. The U.S. Court of Appeals for the Second Circuit declined
to review the question before trial. The U.S. solicitor general showed
sympathy but recommended that the U.S. Supreme Court take a pass for
now, which it did when the justices denied Arab Bank's cert petition in
June.
Paradoxically, Arab Bank's straitjacket
may have given it the guts
to go through with this trial because it believes its prospects on
appeal are outstanding. On the basis of recent Supreme Court cases in
other contexts, DLA argues that the Anti-Terrorism Act requires a
showing that the injury would not have occurred "but for" the
defendant's acts. Osen argues that he will prevail under the Second
Circuit's precedent, which he believes requires only that the
defendant's acts be a "substantial factor" in the chain of causation,
and that the injury be foreseeable. Judge Cogan has deferred the
question. In any event, the bank sees the jury presumptions as its
appellate ace in the hole. Osen professes to be unworried. He's safe, he
says, so long as the jury has ample grounds to conclude that the bank
knowingly served terrorists based on what the plaintiffs have shown.
In the here and now, neither side is punting the trial, which resumes Monday.
Arab
Bank's defense is well summarized by U.S. District Judge Jack
Weinstein's logic in dismissing a companion case in 2012: "Hamas is not
the defendant; the bank is. And the evidence does not prove that the
bank acted with an improper state of mind."
Of 12 alleged Hamas
charities, Stephens argued on Thursday, none was designated as a terror
group when Arab Bank did business with them. According to Stephens,
another set of Arab Bank customers alleged to be senior Hamas leaders
contained no one designated as a terrorist by the U.S., European Union
or United Nations. The Saudi Committee has never been listed, he said,
and none of the 73 Saudi Committee payments routed through New York went
to a designated terrorist. Of 97 questioned customers for which Arab
Bank processed payments in New York, only three were on the designated
list, notably Sheikh Yassin. Of 16 alleged Hamas leaders who did
business with Arab Bank, none was ever listed on the EU or U.N. terror
lists. And only two were eventually listed by the U.S., again including
Sheikh Yassin.
To Osen and company, the fact that official
diplomats usually lack the nerve or knowledge to call a terrorist a
terrorist is not a defense. On the contrary, it's the raison d'être for
private terror litigation, which has sometimes been called plaintiffs'
diplomacy. But Arab Bank maintains that it followed the regulations. The
handful of exceptions, it says, flowed from innocent mistakes—or
tragicomic misspellings.
When Arab Bank processed a $60,000
payment to Yassin two days before the Dolphinarium bombing, OFAC cleared
the transaction. Why? Because Sheikh Ahmed Yassin had a name that can
be misspelled in myriad ways. Shand Stephens displayed a slide showing
eight variant spellings of Yassin by the plaintiffs' own experts. The
bank transfer had him as Ahmad Ismail Yasine. In 1995 OFAC had him as
Shaykh Ahmad Yasin. In 2003 OFAC had him as Sheik Ahmed Yassin. One gets
the sense that Mouamar Qadaffi (Muamar Kaddafi?) could have used the
U.S. Mint as terror HQ without getting caught.
Anyone who stares
at Sheikh Yassin's face may be able to sense evil. But his name sounded
harmless to a dumb government computer circa 2001. Arab Bank says that's
good enough. Will a Brooklyn jury demand more?
