U.S. judge rules Bank of China can be sued in terrorism case
Thursday, October 21, 2010; 12:43 AM
The unusual 118-page ruling came as Chief Judge Royce C. Lamberth of the U.S. District Court for the District of Columbia denied a request by attorneys for the state-controlled bank, one of China's largest, to have it dropped from the case.
Victims of overseas terrorist attacks are increasingly turning to U.S. courts for restitution. Many are pursuing claims not only against shadowy groups or rogue nations but also against financial institutions with substantial economic interests to defend.
The case in the D.C. federal court was brought by the parents of Daniel Wultz, a 16-year-old from South Florida who was visiting Israel four years ago when he was fatally wounded in an attack on a Tel Aviv restaurant. The Palestinian group Islamic Jihad, which the U.S. government says receives financial support and training from Iran and safe haven from Syria, claimed responsibility for the attack.
In the suit, Wultz's parents, Yekutiel and Sheryl Wultz, are seeking $300 million in damages from Iran and Syria, as well as from the Bank of China (BOC), under legislation that allows victims to sue terrorist-sponsoring states in U.S. court.
The 2008 lawsuit alleges that officials at the Bank of China ignored warnings by senior Israeli officials that Islamic Jihad was financing deadly bombings through a Bank of China account in the United States maintained by a purported senior officer of the militant group, Said al-Shurafa.
Specifically, the lawsuit claims that in an April 2005 meeting, counterterrorism officials with Israel's prime minister's office demanded that China's central bank and Ministry of Public Security stop the Bank of China from assisting Shurafa, but China "demurred."
In weighing whether the claims against the bank can go forward, Lamberth wrote: "The Court must assume the truth of this allegation, which is plausible because it is reasonable to assume that, although BOC is not directly owned by China . . . China does exert a measure of control over the BOC through China's central bank, the People's Bank of China."
In a statement, Wang Baodong, a spokesman for the Chinese Embassy in Washington, said that China and Chinese businesses firmly oppose terrorism and "strongly question the allegations in question."
Wang added, "Our hearts are of course with victims of terrorist activities and their families, but we need to respect facts when it comes to credits and liabilities."
Mitchell R. Berger, an attorney for the Bank of China and partner at the Patton Boggs law firm in Washington, which is also being paid a $420,000-a-year retainer to represent the Chinese Embassy, declined to comment.
Spokesmen for the State and Justice departments also declined to comment.
The Wultzes' attorney, Robert Tolchin of New York City, said that while the ruling was not a final finding of liability and would likely be appealed, the judge sent a clear warning.
"The lifeblood of terrorism is money. You can't shoot missiles if you can't get money to buy them," Tolchin said. "Judge Lamberth has taken a significant bite out of that process by allowing this case to proceed. There will be financial consequences for those who try to profit from aiding and abetting terrorists."
Staff researcher Julie Tate contributed to this report.