Arab Bank’s Blood Money
By John Wood
Earlier today, Arab Bank plc of Jordan announced that Credit Agricole CIB, HSBC Bank Middle East and JP Morgan plc, had been appointed to arrange a five-year $500 million syndicated loan. In 2006, Arab Bank enjoyed record pre-tax profits of $790 million, and total assets of $32.4 billion.  Not bad for a bank which in August 2005 was fined by FinCEN and OCC a $24 million civil penalty for violations of the Bank Secrecy Act. .
The civil penalty, and subsequent events (see below), raise several important questions: Although it is permissible to do business with the Arab Bank, is it appropriate for Western financial institutions to assist entities which allegedly support terrorism?
And it appears that a $24 million civil penalty has done little to deter the Arab Bank’s support of terrorism, so when will FinCEN issue fines that financially hurt offenders?
Finally, Is FinCEN, or indeed the U.S. government willing to enforce its own laws and put in jail the responsible managers of financial institutions for aiding terrorists?
This syndicated loan announcement comes on the heels of Brooklyn Federal Judge Gershon’s order of January 29, 2007, in which she rejected the Motion to Dismiss filed by Arab Bank, plc, on the grounds that the Second Intifada does not violate international norms, and affirmed that the lawsuit of Oran Almog et al. (04 CV 5564) could go forward. The lawsuit alleges that the Arab Bank provided banking services to Hamas. The lawsuit also alleges that Arab Bank provided banking services to Islamic charities affiliated with terrorist organizations, including the Popular Committee for Support of the Intifada, the Coalition of Benevolence, the Humanitarian Relief Association, the al-Ansar Society and Tulkarem Charitable Committee. In addition, the complaint alleges that Arab Bank laundered funds for the Holy Land Foundation for Relief and Development. Lastly, the complaint alleged that Saudi organizations, the Popular Committee for Assisting the Palestinian Mujahideen and the Saudi Committee for Aid to the Al Quds Intifada (the Saudi Committee) set-up with Arab National Bank of Saudi Arabia (which is 40% owned by Arab Bank) “Account 98” to provide funds to the families of suicide bombers of Hamas, the al-Aqsa Martyrs Brigade, the Palestinian Islamic Jihad and the Popular Front for the Liberation of Palestine. 
The December 15, 2004, Litle lawsuit (CV 04 5449) alleges that Arab Bank plc received money from the Saudi Committee, which via its New York branch then laundered and paid out in U.S. dollars funds to the families of Palestinian suicide bombers. This scheme included an insurance benefit of $5,316.06 that was administered to the families of suicide bombers by Arab Bank. The complaint goes on to allege that between December 2000 and November 2004, the Saudi Committee via Arab Bank branches made 200,000 payments worth $90 million into Palestine. In the process, the complaint alleges, Arab Bank consulted with the Saudi Committee and representatives of Hamas, they finalized the list of eligible beneficiaries, maintained a database of those covered by the insurance plan, and opened dollar accounts for beneficiaries.