Bank of China Affair

U.S. Family Accuses Israel of Bowing to Chinese Pressure in Anti-terrorism Case

Lawyers for family of teen killed in 2006 bombing in Tel Aviv ask U.S. court to order Israeli testimony on China’s role in facilitating terrorist funding.

Lawyers for the family of a 16-year-old American killed in a suicide bombing in Tel Aviv in 2006 asked a U.S. federal court on Tuesday to reject Israel’s attempt to prevent a key witness from testifying in a lawsuit against state-owned Bank of China. The lawyers for the family of Daniel Wultz urged the court to require former Israeli intelligence officer Uzi Shaya to testify as a witness in the terrorism financing case, which was initiated by Israel itself, according to court documents. 

The lawsuit revolves around allegations that Bank of China knowingly allowed Palestinian terrorists to use its accounts to finance their operations, including the restaurant suicide attack that killed Wultz and 10 others. Israeli intelligence said it had information that terror networks of the Islamic Jihad and Hamas, who were indirectly linked to the suicide bomber, had made significant use of bank accounts controlled by Palestinians in China to finance their activities.

The Bank of China denies the allegations.

Wultz’s parents, who live in Florida, hoped that evidence from Shaya, who allegedly told Chinese counterparts in 2005 about the suspicious bank transactions, would prove decisive. After initially helping Wultz’s parents prepare the U.S. lawsuit against China’s fourth largest lender, the Israeli government hit the brakes last month, filing a petition seeking to prevent Shaya from giving testimony.

The documents filed on Tuesday by the Wultz family lawyers, which Haaretz has obtained, call on a U.S. district court in Washington to reject the Israeli petition, accusing Prime Minister Benjamin Netanyahu of buckling to pressure from China in the case.

In a November 15 motion, Israel argued that if Shaya testified in the case being brought under U.S. anti-terrorism law, he might reveal state secrets that could harm Israeli security.

The Wultzes dismiss this argument, saying the Israeli government and the Mossad had actively encouraged them to launch the case and handed over copious evidence.

Adding to the high profile of the case, Wultz’s mother, Sheryl, is a cousin of U.S. House Majority Leader Eric Cantor. The family is suing for compensation of hundreds of millions of dollars.

“The complaint was filed only after the government of Israel repeatedly assured my attorneys that it would provide cooperation and support for our allegations,” Daniel’s father, Yekutiel Wultz, said in a written declaration. The family said they received a personal phone call from Netanyahu’s office on the matter in April 2012.

“The government of Israel also identified and voluntarily designated Uzi Shaya as the witness,” he said, adding that Shaya had made clear he was happy to give evidence if allowed to.

Chinese pressure

In their documents, the Wultzes say they were told by Netanyahu’s office in April 2012 that Shaya would testify. That was in line with the national policy championed and implemented by Prime Minister’s Office to combat terrorist financing by providing information to victims of attacks to enable them to bring civil lawsuits against entities that support terrorism.

A year later, the position changed. Israeli media reported that Netanyahu had done a U-turn in order to secure an invitation for an official visit to China in May. The family said this about-face followed massive pressure by the Chinese government to bury evidence of alleged wrongdoing. The deal, the family said, allowed Netanyahu to visit China in May with his wife, their children and a large entourage for five days of “sightseeing and meetings,” during which they were “treated like royalty”.

“While we are respectful of China’s interests, and of the diplomatic pressure to which Israel has been subjected, those interests and that pressure cannot be permitted to obstruct the ability of American courts to hear critical evidence,” David Boies, the lead Wultz family lawyer, said in a statement.

“The State of Israel should not be allowed to sabotage a case, which it set in motion in the courts of the United States to advance its own national agenda, by using the expansive pretense of national security – an interest that it has never previously raised during the five-year pendency of this lawsuit, or in any similar case,” stated the court the brief.

Israel has not responded to charges it caved into Chinese pressure. On Tuesday, Netanyahu’s office reiterated a November 16 statement, which said Shaya’s evidence might jeopardize international efforts to tackle terrorism.

Israeli intelligence agencies set up a unit to try to stop funds from reaching Palestinian militant groups, including the Islamic Jihad, which claimed responsibility for the 2006 blast. Shaya was part of the unit and travelled to Beijing to urge the Chinese government to close suspect accounts.

The U.S. legal move coincided with the start of a high-profile visit to Israel by Chinese Foreign Minister Wang Yi.

Israel has until January 6 to file a response to the motion. 

The Prime Minister's Office responded to the accusations, saying the Israeli government cannot allow anything to undermine state security, and that being tried would breach the legal immunity that states enjoy against legal proceedings in foreign countries’ courts.

“Israel is working aggressively and resolutely to maintain the security of everyone living in its territory,” the Prime Minister’s Office said in a statement. “In this case, too, Israel is working with all the means at its disposal to fight terrorists and prevent various parties from supporting them. 

“At the same time, state agencies are obligated to ensure that the information to which civil servants are exposed in the course of their work will remain confidential. Therefore, the State of Israel asked the U.S. court to cancel the subpoena it issued against a (former) Israeli civil servant ordering him to testify in the U.S. in the damages suit filed by victims of terror against the Bank of China. 

“After a comprehensive review of the matter, the State of Israel decided that it cannot permit the former employee to hand over any information obtained by virtue of his position as a civil servant. Giving such information could harm Israel’s national security, endanger Israel’s ability to defend those living in its territory against the threat of terror and other grave threats, and undermine international cooperation in the battle against terror. Moreover, requiring the employee to testify on matters of this sort would undermine the immunity that the State of Israel, like every other state, enjoys against legal proceedings in foreign countries’ courts. 

“In the name of the citizens of the State of Israel, we identify deeply with the pain of the families of victims of terror, whose loved ones’ lives were cut short by degenerate murderers. The memory of their loved ones will be preserved forever in the nation’s heart.”