Aug 14

Hamas Transactions Got Through in Error, Bank Says

The plaintiffs cited specific bank transactions: a 2001 transfer of $60,000 to a Hamas leader, as well as cash payments on behalf of a Saudi charity routed through Jordan, then Ramallah, and then sent out to Arab Bank branches.

Those transactions as a group, they argued, allowed Arab Bank to fuel terrorism.

“You have got to stop the financial services,” said C. Tab Turner, one of several lawyers representing almost 300 plaintiffs in a landmark trial that opened on Thursday in Federal District Court in Brooklyn. “Take the money away, you can’t make bombs.”

The case, the first civil trial against a bank under the Antiterrorism Act, accuses Arab Bank, whose headquarters are in Jordan, of knowingly financing Hamas. Plaintiffs in the case are victims or family members of victims of 24 terrorist attacks in the early 2000s linked to Hamas.

If the plaintiffs prevail, the case could set a precedent, opening up banks to liability for transactions linked to criminals, and giving terrorism victims a potent way to seek compensation.

The plaintiffs laid out their case on Thursday, focusing on specific transactions and bank accounts tied to Hamas, as well as a payment program by a charity called the Saudi Committee.

Arab Bank says that the transactions in question are a handful that slipped through in error, and that it took proper compliance steps, screening its account holders and the transactions against the applicable lists of terrorists.

But one specific account rose to prominence in the plaintiffs’ opening arguments: the so-called Beirut account, opened by Osama Hamdan at a Lebanon branch of Arab Bank in 1998. Mr. Hamdan is now known as a spokesman for Hamas.

The plaintiffs pointed to several questionable transactions from that account, including Mr. Hamdan’s transferring about $60,000 out to a Hamas leader in 2001. In other cases, transfers came in to Mr. Hamdan’s account that were coded with his account number, but with “Hamas” as the designee.

Later, “the bank had a private communication with Hamdan,” Mr. Turner said. “He came to the bank and he withdrew his money.”

The bank had a different version of events.

Shand Stephens, a lawyer for the bank, said in his opening remarks that Mr. Hamdan gave his occupation as a merchant when he opened the account in 1998. He was not added to the applicable terrorism lists until 2003, so his account was not flagged, Mr. Stephens said.

Four transfers into that account listed Hamas as the beneficiary party, and those transfers totaled $730, he said. “How did that go through?” he said. “It was a mistake. That simple.”

As for the transfer from the account to the Hamas leader, it was checked against the list, but it went undetected because the renderings of the name on the list and on the transfer were different, he said.

“That is the way, by the way, banking works,” Mr. Stephens said. “Take the lists, put it in the computer. You make sure that the software is functioning as best it can, and then you rely on that to make sure you’re not doing financing for people who are criminals.” He acknowledged that software can now catch different spellings and renderings, but said that was not the case a decade ago.

“The fact that that transaction happened does not show the bank knowingly supported terrorism,” Mr. Stephens said. “What it shows is the spelling was different.”

After the bank learned, in 2004, about the allegation that Mr. Hamdan’s account was being used by Hamas, Mr. Stephens said, the bank froze the account and asked the Lebanese security authority for instructions. The authority did not respond. In 2005, “because the bank can’t hold on to somebody’s money without some instruction, the money was returned to him,” Mr. Stephens said.

The other major point of contention was the bank’s relationship with the Saudi Committee. The plaintiffs say the bank helped the committee distribute cash to relatives of suicide bombers, and “helped incentivize these people, primarily kids, to commit these suicide attacks,” as Mr. Turner put it.

Arab Bank acknowledged that it processed payments on behalf of the Saudi Committee. But its lawyer said the committee had never been designated a terrorist group, and it “supported thousands of widows, orphans and families” who had lost a breadwinner in the second intifada, legitimate payments that Arab Bank handled.

The bank and the plaintiffs agree it had access to a document from the Saudi Committee that listed martyrs, their causes of death and their beneficiaries. “They knew that they were banking for Hamas,” said a plaintiffs’ lawyer, Mark Werbner. “This was foreseeable.”

But bank officials claimed they had not reviewed that document in detail, a claim that plaintiffs said jurors would have to evaluate for themselves. And the bank argued that “martyr” had a broad meaning. While a few relatives of terrorists may have been among the recipients, “a martyr does not mean a terrorist,” Mr. Stephens said. “It does not mean a suicide bomber. It means someone who’s dead.”

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