Does Israel have a legal right to block testimony against the Bank of China?

Does Israel have a legal right to block testimony against the Bank of China?

By Yonah Jeremy Bob
Jerusalem Post

Analysis: Amid the allegations that Israel has “sold out” to China, the government’s explanation of its motives has raised as many questions as it answered.

Analysis: Amid the allegations that Israel has “sold out” to China, the government’s explanation of its motives has raised as many questions as it answered.

The government filed a motion Friday to block a former government agent from testifying against Bank of China in a case over its alleged facilitation of laundering of funds to Hamas and Islamic Jihad used to perpetrate terror attacks.

The motion was a sharp blow to the efforts of Shurat Hadin – Israel Law Center and the Wultz family to hold Bank of China accountable for its alleged actions between 2003 and 2008 through the US legal system.

Shurat Hadin, which has been representing the families of terror victims in the case, accused Prime Minister Binyamin Netanyahu of turning his back on terror victims in order to please China in a general campaign to promote closer business and other relations between the countries.

But both in the motion and in the “court of public opinion,” the government said that it was seeking to block the agent, Uzi Shaya, from testifying in New York because of the danger to Israel’s national security of one of its former agents being forced to reveal state secrets in a foreign court.

The government is indicating that it has a general objection to setting a bad legal precedent of Israeli government agents having to testify in foreign courts, as well as a specific objection to Shaya being compelled to divulge specific state secrets connected with the case.

Separate from public opinion and specifically for American legal purposes, Israel also raised the principle of sovereign immunity protecting foreign officials from having to testify in almost all cases.

Israel will no doubt win its motion in court on the procedural sovereign immunity principle. But does the meat of its legal arguments, which it made partly to confront public criticism that Israel is “turning its back” on the victims of terror, as Shurat Hadin alleged, hold any weight? Former high-level government agent Reuven Paz testified in around half-a-dozen proceedings in the US against Iran prior to 2002, according to an affidavit that he filed in a federal court in Washington.

According to Shurat Hadin, he testified in a number of proceedings following 2002 as well.

Moreover, in 2008, an Israeli government agent was allowed to testify anonymously, with no photographs and behind closed doors, in the famous Holy Land Foundation terror financing case in the US.

So where is the sudden concern coming from about setting bad precedents which, whether good or bad, are already clearly set? The claim of state security also has some serious issues.

In 2008, government agent Shlomo Matalon filed an affidavit in a different but related case, outlining in meticulous detail bank account numbers and fund transfer amounts between Bank of China and terror organizations. Matalon also specifically said that China was warned about the transfers at a meeting with Israeli agents in 2005 – the central point that Shurat Hadin and the Wultzes wish to make to win their case, as the bank claims that it did not know funds were going to terror organizations until 2008.

The only obvious differences between Matalon’s affidavit and Shaya testifying are: Matalon could not be cross-examined because he filed “testimony” in writing; and Matalon reported on the 2005 meeting based on information he was told, most likely by Shaya, but unlike Shaya, was not present at the meeting himself.

In other words, exposing someone only in writing and who was not at the meeting to public scrutiny is potentially less risky than exposing someone in-person who was at the meeting and could divulge more state secrets relating to the event.

While that argument may carry some weight, substantively there is nothing that the plaintiffs needed Shaya to testify to that Matalon had not already put out in the public sphere.

Also, Shaya has set out a number of specific conditions for testifying, including doing so from Israel with a current government agent present to consult with to ensure no state secrets were revealed, and asserting his right to not answer any questions which pertained to state secrets.

In the 2008 Holy Land Foundation case, a prior US court gave unprecedented special testifying conditions to an Israeli agent, against vehement objections by the defendants, in order to obtain his testimony regarding links between the foundation and Hamas. Why not see if the current US court (which has shown significant patience overall on this issue) would allow Shaya to testify under special conditions as well? In the face of these considerations, Israel’s arguments – that allowing Shaya to testify would expose Israeli intelligence’s methods, sources and capabilities; that it would “undoubtedly” expose him to cross-examination in which he would “inevitably” have to reveal state secrets – ring hollow.

The argument that most calls the government’s position into question is its objection that Shaya would have to travel too far. As mentioned, Shaya proposed testifying from Israel, not from the US. In that vein, it is worth noting that an Israeli court recently allowed Ehud Olmert’s brother Yossi to testify in an Israeli case via video conference from the US. Further, Shaya personally has made it clear that he wanted to testify, and the plaintiffs’ were ready to pay Shaya’s airfare and hotel expenses if he did decide to testify in the US.

The government has held its cards close on this issue, so it is impossible to know for sure whether there is some additional specific national security issue, but amid the allegations that Israel has “sold out” to China, the government’s explanation of its motives has raised as many questions as it answered.



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