Suit Links Arab Bank, Terrorists

By Nathaniel Popper

Published July 09, 2004, issue of July 09, 2004.
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A lawsuit filed last Friday in Brooklyn, N.Y., federal court alleges that the Arab Bank, a leading Jordanian institution with deep commercial ties in this country, has been using its New York branch to help channel funds to the families of Palestinian suicide bombers.

The suit, brought by the families of six Americans injured or killed by terrorist attacks in Israel, charges the bank with helping to “encourage and facilitate” Palestinian terrorism. The families are seeking $875 million from the bank.

The suit is the latest in a line of recent cases made possible by federal anti-terrorism legislation dating from 1996 and 2001, permitting American citizens to file private suits against foreign countries and companies that provide “material support” for terrorism. In 2002, the families of September 11 terrorist attack victims filed a suit for almost $1 trillion against foreign concerns allegedly tied to Al Qaeda.

Legal experts say that in an increasingly globalized world, these civil suits could point the way toward a major new battlefield in the war against terrorism, where individuals use the courts to prosecute terrorists privately rather than rely on government action.

“We’re seeing here the beginning of a huge wave of cases like this,” said Northwestern University legal scholar Anthony D’Amato, who specializes in international law on terrorism. “In a shrinking world, it’s inevitable that our courts are going to be more and more open to individual cases with foreign elements.”

The Arab Bank suit is the first in what could be a series of suits by Americans hurt in Israel. Allan Gerson, the lead lawyer in the September 11 victims’ suit, is preparing another. From 1993 to 2004, some 52 American citizens died and 83 were injured in Palestinian terrorist attacks, according to the congressional Republican Study Committee.

In contrast to earlier cases brought as a result of the 1996 Antiterrorism Act — including suits against Iran, Libya and Hezbollah — the Arab Bank case is distinguished by the specificity of the charges and the vulnerability of the defendant to the American commercial and legal system.

“The Arab Bank is someone who is going to show up in court rather than have a default judgment entered,” said Gary Osen, one of four lawyers representing the plaintiffs.

According to Osen’s court filing, the Arab Bank knowingly administered a “comprehensive insurance benefit” for Palestinian suicide bombers, offering one-time payments of $5,316 each to bombers’ families.

Funding comes from the Saudi Committee in Support of the Intifada Al Quds, a private charity established in October 2000 with the support of the Saudi interior minister, the suit alleges. It also alleges that while the money is Saudi, the Arab Bank, as the “exclusive administrator” of the funds, “finalizes the list” and “maintains the database” of eligible families.

The Arab Bank uses its New York branch on Madison Avenue to change Saudi riyals into American dollars, which are distributed at branches in the West Bank, according to the filing.

In a prepared statement, the Arab Bank called the accusations “both completely false and totallly irresponsible.”

The choice of a defendant with strong American commercial interests takes a page from the strategy used in the 1990s Holocaust restitution cases brought against Swiss banks and German industry.

Not coincidentally, it appears, the lawyers in the new case filed suit in the same court where many prominent Holocaust-era cases were heard: the U.S. Federal Court for the Eastern District of New York, which has a number of Jewish judges and sits in the heart of Jewish Brooklyn.

The plaintiffs in the case include Steve Averbach, 38, a father of four who was paralyzed from the neck down in an October 2003 Jerusalem bus attack. “We hope that this case will hit them in their pocketbook,” said Maida Averbach, Steve’s mother.

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