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No More Appeals By: Dr. Rachel Ehrenfeld and Alyssa A. Lappen
The Washington Times | Wednesday, July 16, 2008


The Palestinian Authority (PA) recently asked U.S. federal courts to reopen cases it lost after refusing to defend itself against terror-funding charges.

Judgments would come from U.S. and international aid, the PA argues.

In both cases, Palestinian terrorists murdered American citizens. In New York, Aharon Ellis' widow sued the PA for the lethal 2002 shooting of her husband and the father of their six children, during an Al Aqsa Martyr Brigade attack of a Bat Mitzvah, in Israel. The court awarded Leslye Knox $193 million, including interest, but the PA refuses to pay.

A Rhode Island case centers on the June 1996 double murders of U.S. citizens Yaron Ungar and his pregnant wife Efrat, both 25. Three Palestinian terrorists shot them to death in Beit Shemesh, west of Jerusalem. The PA was ordered to pay their families $116 million, which the PA also refuses to do.

Neither award was "by default," as the PA now argues. Several law firms represented the defendants in New York making hundreds of procedural motions and appealing twice, all while the PA refused to answer to the charges. However, they never denied their guilt.

In Rhode Island, the Palestinians' law firms, including that of former U.S. Attorney General Ramsey Clark, claimed sovereign immunity. The court nixed that claim and in August 2005 , froze PA assets in the U.S., including over $1.3 billion in the Palestinian Investment Fund, and $30 million in the Palestinian Monetary Authority.

Meanwhile, the PA's 2005 and 2006 appeals didn't sway the U.S. State Department to intervene. The Supreme Court's decision not to review that case renders the judgment "final and enforceable in United States courts," said Secretary of State Condoleezza Rice, who proposed the PA explore "out of court solutions ... to avoid enforcement actions" and financial hardship.

The PA's desire to use the U.S. government to prevent the victims from collecting rightful and lawful awards was denied in March 2008. "The United States supports just compensation for victims of terrorism from those responsible for their losses," said Deputy Assistant Attorney General, Carl Nichols, though he noted the "potentially significant impact that these cases may have on the financial and political viability of the defendants." The PA seems to bank on that concern.

PA Prime Minister Salam Fayyad wants the cases reopened not to challenge its guilt. If PA funds were seized to satisfy outstanding judgments, Mr. Fayyad argues in U.S. federal courts, "Donors may hesitate to contribute funds to the Palestinians." Further, Mr. Fayyad pleads PA poverty. Relying on five-year-old financial statements. He claims the PA has only $800 million, although he admits that this does not include PA pension funds or the Palestinian Investment Fund - not to mention $22 million paid annually to Suha Arafat since her husband's 2004 death, or hidden PA assets probably up exponentially since they were estimated at $10 billion in 1993.

From 1994 to early 2007, the PA received between $14 billion and $20 billion from Europe and the United States, the Funding for Peace Coalition (FPC) reported to the British parliament.

Despite purported PA poverty and Fatah-Hamas disagreements, the PA announced on January 15, 2008 its intentions to give Hamas, a U.S.-designated terrorist organization since 1995, "40 percent" ($3.1 billion) of the $7.4 billion pledged in December 2007 by international donors. Evidently, the donors did not take this statement seriously, and from January to June 2008, gave the PA $920 million in direct budgetary aid.

Fifteen months ago, Fayyad told London's Daily Telegraph: "No one can give donors the assurance" that funds reach designated destinations. "Where is all the transparency; It's gone." Controlling Palestinian finances, he concluded, "is virtually impossible." World Bank and other reports document PA financial chaos and corruption, too. Yet, none of this has turned the donors money spigot off.

Clearly, the Palestinians are in no danger of losing funding from their international donors. Now, that a Fatah and Hamas power-sharing government is around the corner, the donors will surely go out of their way to reward the new government with even larger sums. The Palestinians, in a time-honored fashion, will use these donor's funds against Israel and its citizens, as they have done since 1994.

As for Fayyad's appeals, they are irrelevant in U.S. federal courts. The PA never denied its role in the murders, failed to defend itself, and lost in court fair and square, not "by default." It's time justice be done and the courts force the PA to pay every dime they owe the victims' families.


Dr. Rachel Ehrenfeld is author of Funding Evil; How Terrorism is Financed and How to Stop It. She is director of the American Center for Democracy and member of the Committee on the Present Danger. Alyssa A. Lappen, Senior Fellow at the ACD, is a former editor for Forbes, Corporate Finance, Working Woman and Institutional Investor.


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