By Michael D. Goldhaber / The Litigation Daily
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. 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 Stevens 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, Stevens 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 Stevens 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, Stevens said, because “he thought it was a great thing both for Arab Bank and actually for the peace process.” After all, Stevens 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.”)
Stevens 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 Stevens 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, Stevens argued on Thursday, none was designated as a terror group when Arab Bank did business with them. According to Stevens, 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, Arab-Bank’s OFAC-filtering software cleared the transaction. Why? Because Sheikh Ahmed Yassin had a name that can be misspelled in myriad ways. Shand Stevens 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 computer circa 2001. Arab Bank says that’s good enough. Will a Brooklyn jury demand more?