Boston Globe - August 30, 2005
Palestinian Authority's US assets are frozen
By Farah Stockman
WASHINGTON -- A Rhode Island lawyer trying to collect a $116 million terrorism judgment against the Palestinian Authority has obtained a court-ordered freeze on all its US-based assets, severely limiting most Palestinian economic and diplomatic activities in the United States at a critical moment for the fledgling government.
The frozen assets include US holdings in a $1.3 billion Palestinian investment fund meant to finance economic development as well as bank accounts used to pay Palestinian representatives in Washington, according to lawyers and court documents filed in Rhode Island, Washington, D.C., and New York. Also frozen are about $30 million in assets from the Palestinian Monetary Authority, the Palestinian equivalent of the US Federal Reserve.
Providence attorney David Strachman, who is representing the orphaned children of a couple killed in Israel by Palestinian militants, has also initiated a court action to seize and sell the Palestinian-owned building in New York that serves as the Palestine Liberation Organization observer mission to the United Nations.
The aggressive collection effort comes as the Palestinian Authority is struggling to create economic opportunity and set up a viable government. Now, Palestinian officials say, the unpaid claim in the Rhode Island court, resulting from a 2004 ruling, threatens to complicate their efforts to become a credible emerging state.
The case puts the Bush administration in the delicate position of giving financial aid and political support to an entity that has refused to obey a US federal court order to pay terrorism victims.
The case has created such a problem for Palestinians that Salam Fayyad, the Palestinian finance minister, recently asked Secretary of State Condoleezza Rice for advice, according to a Palestinian official who asked not to be identified. The State Department could not confirm Fayyad's request last night.
The Justice Department told a court in New York that it will submit next month the US government's position about the PLO mission in New York, but it is unclear how much help the Bush administration can or will offer.
Palestinian officials have refused to pay the claim, arguing that doing so would be a politically dangerous admission of responsibility for terrorist acts by militants that the Palestinian Authority contends it does not control. Three officials interviewed by telephone from Gaza and the West Bank say they fear setting a precedent that would spur an avalanche of lawsuits that could bankrupt the new government. At least four other lawsuits involving deaths of US citizens in Palestinian attacks are pending in US courts.
The case is the first to result in a financial judgment under a 1991 antiterrorism law that allows US citizens to sue foreign organizations in civil court for terrorism. It stems from the 1996 murders of Brooklyn-born Yaron Ungar, a US citizen, and his pregnant Israeli wife, Efrat, whose car was sprayed with bullets by Hamas militants.
In 2000, he filed a civil suit in Rhode Island, his home state. He sued Hamas, as well as then-Palestinian leader Yasser Arafat, the Palestinian Authority, which Arafat headed, and the PLO on the grounds that they had encouraged Hamas. Arafat hired Ramsey Clark, the former attorney general, who argued that the Palestinian Authority is a sovereign state, and deserved immunity from prosecution granted to most countries.
Last year, the court ruled that Palestine is not a state, and that Hamas, the PLO, and the Palestinian Authority owed the Ungars $116 million. In March, a federal appeals court upheld the verdict.
Court documents show that the Bank of New York has halted money transfers to Palestinian missions in Ukraine, Guinea, Indonesia, Pakistan, the Ivory Coast, China, Bulgaria, Norway, Pakistan, and Colombia, as well as New York, because of the court order…..