Lawyers: Court lifts bank freeze on ex-US diplomat

AP News
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Posted: Sep 10, 2014 10:26 PM

WASHINGTON (AP) — An Austrian court has lifted a freeze on bank deposits held by a former U.S. ambassador to Afghanistan, Iraq and the United Nations, and his wife, lawyers for the couple said late Wednesday.

The regional high court in Vienna granted an appeal of an earlier order to freeze the accounts of Zalmay Khalilzad and his wife, Cheryl Benard, according to a statement from the lawyers.

The lawyers said they did not learn of last week's court decision until Wednesday, days after news media reports said Austrian authorities were investigating Khalilzad — the founder of a consulting group — for suspected money laundering related to business activities in Iraq and the United Arab Emirates.

"We are pleased to have been informed that the regional high court in Vienna has ordered all of our assets to be unfrozen and returned to use immediately," the statement said. "The court further ruled that there was no authority for Viennese prosecutors to seek the bank information regarding our accounts in the first place, much less be given the authority to unlawfully restrain us from accessing our accounts."

The Justice Department in May 2013 asked Austrian authorities for records regarding the Viennese bank accounts of Benard, according to a statement by Khalilzad's U.S. lawyer, Robert B. Buehler. Austrian authorities then froze the accounts.

The case became public after a blogger found documents while rummaging through a garbage can used by the state prosecutor's office in Vienna.

Khalilzad strongly contested the decision to freeze his and his wife's accounts, saying it was an overreaction to a routine request for information by the Justice Department to Austrian officials.

The Austrian state prosecutor, Thomas Vecsey, confirmed the blogger's report in the Austrian weekly Profil, which said the inquiry centers on the alleged transfer of $1.5 million to an account belonging to Benard.

Khalilzad was born in Afghanistan and went to the United States as an exchange student. He later became a professor and served various ambassadorships under President George W. Bush. He was the U.S. special presidential envoy to Afghanistan from 2001 to 2003, then U.S. ambassador there until 2005. He was the ambassador to Iraq from 2005 to 2007, and the U.S. permanent representative to the United Nations from 2007 to 2009.

Khalilzad played a key role in the political transition in Afghanistan after the 2001 U.S.-led invasion and the fall of the Taliban. He took center stage organizing the traditional grand councils that eventually would approve Afghanistan's constitution.