As the wave of litigation against Saudi and other alleged 'terrorist financiers' seems to recede, US lawyers are stepping up the pressure on high-profile financial institutions.
There have been victories in the financial battlegrounds of the 'global war on terror' declared by President George W Bush after the 11 September 2001 attacks on the United States; it is harder to launder money world-wide - and to conduct the most basic international transactions - or to obtain funds for underground operations using supposed charities and other front organisations. But for all the talk about cutting off Al-Qaeda and other terrorist groups - some, like Hamas, the governing group in the Palestinian Authority, widely seen as 'freedom fighters' - many 'terrorist financing' actions have come to nothing.
Most of the charges against Saudi businessmen, senior members of the Al-Saud family and institutions accused of financing Al-Qaeda in civil litigation led by South Carolinabased law firm Motley Rice have been dismissed by US judges.
Other US lawsuits against members of the Saudi elite have also failed, but the lawsuits just keep coming. Thus a mogul of the Arab/Islamic financial and media scene, Al-Baraka Investment and Development Corporation chairman Sheikh Saleh Abdullah Kamel - who was among those accused in the Motley Rice case - had a suit filed against him last December on behalf of US insurance companies focusing on suspicions of terrorist financing;within the month the case was dismissed by US judge Richard Conway Casey.
A legal source active in defending terrorism finance cases was highly critical of the way such litigation was being dealt with in the USA, calling it a "big mess." Talking to GSN from the Gulf, he argued that there were still no specific procedures in place to fight against claims of links to terrorism, while defence teams suffered from a lack of co-operation from US authorities and the abuse of information; he described this as a "Kafka-like jurisprudence targeting Muslims."
Civil litigation lawyers have not given up on Saudi and other Gulf nationals, but they are increasingly focusing their efforts on major international banks and their alleged role in terrorist financing - representing a shift away from Al-Qaeda towards Hamas and Lebanon's powerful Hizbollah movement.
Meanwhile, the US government's focus is turning to Iran, action against whose major state banks is seen by Washington to be yielding political dividends.
Confusing the facts
The legal source argued that problems in international terrorism finance cases mainly stemmed from the lack of a structure for people to defend themselves when they are suspected by the US authorities. This issue is now being dealt with in European courts, he added. "When bone fide businessmen and charities are assigned as specially designated global terrorists [SDGTs] by the US Treasury's Office for Foreign Assets Control [Ofac] there is no due process to defend themselves against their assets being frozen. Claims are made, but the authorities don't explain what evidence they have, or what you're being accused of - there are no systems in place to allow for information to be scrutinised," the legal source commented: "People don't understand how they can become delisted from being a SDGT."
He also complained about the "confusion" over the "historical and political context", arguing that "not everyone who had business dealings in Afghanistan during the 1980s war against the Soviets became a financier of Al-Qaeda. It is true that some people did support [Osama] Bin Laden, andthe fight of the mujahideen; however, the suspicion that those people financed 9/11 is irrelevant, since they are based on dealings with Bin Laden before Al-Qaeda became dangerous."
Another problem in tackling terrorist financiers is the frequent mistaken identities that emerge when it comes to identifying Arab/Islamic names. "This has caused a lot of problems with the wrong people getting arrested, and having their assets frozen, because they share the same name as the real suspect," the legal source complained.
This has also been the experience of GSN, and of research staff with GSN's parent company Cross-border Information Ltd, who are often asked whether the Gulf-based business people looking to do deals withWestern firms are the same individuals as named as Al-Qaeda operatives on official US lists or more generally in reports on the web. Usually they are not and often the names queried can be very wide of the mark.
The rise of civil litigators
Typical is the case being brought by American civil litigation lawyers against Arab Bank and severalWestern banks for their alleged financial dealings with Hamas through its association with a Saudi-registered charity, the Saudi Committee for the Palestinian People, headed by Riyadh governor Prince Salman Bin Abdelaziz.
The venerableArab Bank was among institutions accused of dealing with Al-Qaeda by Motley Rice in its 9/11 suit. In 2005 it paid $24m to the US government to dismiss claims, which it denied, of channelling funds to terrorist groups.
Recently, the LA Times reported that wealthy Saudis were using the bank to finance Palestinian suicide bombers. Arab Bank called this claim "false" According to the legal source,"civil litigators are trying very hard to link Hamas with 9/11, and have brought in Israeli experts to provide the intelligence - but the information in the case is unreliable."
Arab Bank issued this statement to GSN: "The allegations against Arab Bank stemming from civil litigation filed in 2004 are without merit. The transactions in question were routine and lawful at the time and in the jurisdictions in which they were conducted. Arab Bank abhors terrorism, has not knowingly or wilfully supported terrorism, and remains confidents that it will prevail at trial."
Described by The Wall Street Journal as "legal imperialists", the actions of US-based civil litigators against foreign institutions for incidents that occur outside the USA have been called "an abuse of the process" by some international lawyers.
These litigators are using the ancient Alien Tort Statute (ATS) - adopted in 1789 by the new USA to allow federal district courts jurisdiction in civil cases brought by foreigners - to bring actions on behalf of US citizens who have been victim to attacks abroad. ATS was passed to assure a hearing for offences against foreign ambassadors, violations of safe conduct and piracy. Now litigators - including Motley Rice, Sayles Werbner (Dallas), Osen and Associate (New Jersey), Milberg Weiss (New York) and Cohen Milstein (Washington) are trying out ATS test cases using institutions such as Arab Bank and NatWest Bank in an attempt to get around sovereign immunity,which stops lawsuits against governments.
This helps to explain the shift in focus from charges against Saudi royals to attacking institutions that are indirectly linked to the government, such as Arab Bank.
© Gulf States Newsletter 2007
