Arab Bank called Hamas 'paymaster' as trial opens in New York

Reuters News
Posted: Aug 14, 2014 2:39 PM

By Bernard Vaughan

NEW YORK (Reuters) - Arab Bank Plc served as "paymaster" of funds supporting Hamas, lawyers for a group of Americans suing the bank for compensation stemming from attacks by the Palestinian militant group told a jury on Thursday as a long-anticipated civil trial got under way.

In opening statements in U.S. federal court in Brooklyn, lawyers for the plaintiffs said the Amman, Jordan-based bank provided "extensive and substantial" material support to Hamas.

A lawyer for Arab Bank told jurors the evidence will show it did not knowingly support the Islamist group, which runs Gaza and is currently locked in a military conflict with Israel.

Close to 300 U.S. citizens who were the victims or the family members of victims of 24 attacks allegedly carried out by Hamas in Israel and the Palestinian territories between 2001 and 2004 sued the bank in 2004.

They accuse Arab Bank of violating the U.S. Anti-Terrorism Act, which allows victims of U.S.-designated foreign terrorist organizations to seek compensation. The State Department designated Hamas a terrorist organization in 1997.

"This bank served as the paymaster, the distributor of funds" that supported Hamas attacks, Tab Turner, one of the lawyers for plaintiffs, told jurorsĀ in a packed courtroom at the outset of a trial 10 years in the making.

The case is believed to be the first civil court terrorism-financing case against a bank to go to trial in the United States.

Lawyers for the plaintiffs said evidence will show that Arab Bank maintained accounts for Hamas operatives and processed more than $35 million in payments for the families of suicide bombers and those imprisoned or injured during the Second Intifada of the early 2000s. They also said the bank shared Hamas's ideology, and that executives have referred to Israel as the "enemy."

Arab Bank has said it did not cause or provide material support for the attacks. In his opening statement, Shand Stephens, a lawyer for Arab Bank, called the 24 attacks "horrific," adding, "Our hearts go out to the victims."

Most of the people and organizations the plaintiffs claim were affiliated with Hamas, and who received banking services from Arab Bank, were not designated as terrorists during the period in question, Stephens said.

"In short, it's the government who decides who the criminals are," Stephens said. "That's not a decision that's made by private companies."

The bank could be liable for millions of dollars, according to a lawyer for the plaintiffs.

The bank is somewhat limited in its defense because a judge overseeing an earlier phase of the case sanctioned it for failing to turn over certain documents. The bank claimed foreign bank privacy laws prohibited it from providing the records.

As a result, jurors are allowed to infer, if they wish, that the bank's failure to do so meant that it had knowingly provided financial services to designated terrorist organizations.

The trial comes as U.S. federal and state governments increase pressure on international banks' cross-border transactions, leading some to curtail transaction services.

(Reporting by Bernard Vaughan; David Henry contributed reporting; Editing by Will Dunham, Tom Brown and Jonathan Oatis)