When a House Financial Services subcommittee last week took up the issue of Islamic charities and terror financing, what wasn?t seen is far more interesting?and important?than what was.

The story of how what had promised to be an explosive session was gutted is a tale of international lobbying, partisan protection, and misplaced animosity.  And of course, it wouldn?t be genuine intrigue without loads of Saudi cash.

Rep. Sue Kelly (R-NY), chairwoman of the Oversight and Investigations subcommittee, had originally scheduled a hearing for last month that was to include administration officials, experts who were prepared to provide evidence of financing for specific terror attacks, and?to make the human toll tangible?victims and families of victims of terror. 

Though there have been dozens of hearings on the general topic of terror financing, this one was special: the sole focus was to be the suddenly embattled Arab Bank.  The bank earlier this year suffered the partial closure of its New York branch?it can no longer establish new accounts there or accept deposits?after the Office of the Comptroller of the Currency reportedly found gross violations of money laundering and terror finance regulations.

Last week?s emasculated hearing is the first bit of good news the bank has received in nearly a year.  When trial attorney Gary Osen?a free-market conservative who has a penchant for tackling larger-than-life cases?discovered evidence last year suggesting that Arab Bank was knowingly funneling money to Palestinian terrorists, he filed a civil suit on behalf of terror victims last July.  (Famed trial lawyer Ron Motley of asbestos and tobacco lore has since filed a parallel suit.)

Spurred on at least in part by the victims? lawsuit, the OCC and the Office of Foreign Assets Control conducted investigations into Arab Bank, which has $32 billion in assets and was founded in 1930.  Published accounts indicate that the OCC report is damning.  Arab Bank is waiting for the other shoe to drop as OFAC, which by design has a more targeted focus on fighting terror financing, could likely issue an even more scorching report.

Why the feds have waited until this year to act is a question that Congress should have been exploring?if only Arab Bank had remained the focus of the hearing.  Osen learned of Arab Bank?s alleged terror financing not through a well-placed source or covert whistleblower, but on the Internet.  Documents captured by the Israeli Defense Forces during targeted raids of terror outfits yielded a massive cache of evidence tying Arab Bank to funding of Hamas, Palestinian Islamic Jihad, and families of suicide bombers?and the IDF posted much of it on the net.

Though Arab Bank denies it was ever knowingly involved in terror financing, the public record appears to contradict such assertions.  Various jihadist web sites openly raising funds informed prospective donors to direct contributions to numbered accounts at Arab Bank. 

But even more openly than that, advertisements in prominent Palestinian newspapers told families of ?martyrs??suicide bombers?to collect money from Arab Bank.  One February 2002 ad listed names entitled to receive $5,316.06 from the ?Saudi Committee.? Continued...