The issue of terrorism has obviously been in the news due to the recent terrorist attacks in Israel. Farron Cousins fills in for Mike Papantonio and is joined by attorney Chris Paulos, who has been working for many years on terrorism lawsuits, to weigh in.
*This transcript was generated by a third-party transcription software company, so please excuse any typos.
Farron Cousins: The issue of terrorism has obviously been in the news due to the recent terrorist attacks in Israel. I’m joined now by attorney Chris Paulos. Chris, you have been working for many years at this point on terrorism lawsuits, specifically targeting banks that have essentially been laundering money for terrorists, for decades at this point. So, I guess obviously the elephant in the room, we have to talk about this recent attack and what we know, if we know anything about any of the funding or who might be behind it in addition to Hamas.
Chris Paulos: Well, Hamas obviously is a long time terrorist organization, quasi political organization, in the Middle East. And we do know who finances Hamas and what one of their primary sources of funding is and that is the country, the Islamic Republic of Iran. And they have been a long time backer of that group as well as others. And it is part of their constitutional creation of the country, that particular version of Iran to wage jihad against Israel and Western targets, essentially. And so Hamas is one of the arms that they use to do that.
Farron Cousins: And so with Iran, they have been linked to attacks, the funding coming from the country. So is it the government of Iran where this is coming from or are they turning a blind eye to it? How does the funding mechanism work in those instances?
Chris Paulos: So it is absolutely the government of Iran. They use proxy organizations like Hezbollah, Hamas, Al-Qaeda, and those that they have some closer operational relationships with, such as Hezbollah and Hamas or those that they basically provide safe haven, funding weapons to, and let run amuck throughout the Middle East or elsewhere. And strike secret deals like they did with Al-Qaeda, where they would give Al-Qaeda safe haven in Iran, allow them to use their financial infrastructure to fund their operations throughout the globe, but didn’t really have an obvious connection to that group because of the Shia Sunni divide that exists. But that’s how Iran is operating. They’re external, essentially military, paramilitary operations. They’re all conducted by foreign terrorist organizations that they’ve supported with large amounts of money, weapons, training, you name it. Hamas being one of the primary groups that they support.
Farron Cousins: And so obviously this is a very hot button issue whenever you’re talking about Israel and Palestine and you do have issues with what Israel has done in Palestine. But right now, this is almost, it’s related, but it’s not quite related, right. Because we’re dealing with a terrorist attack, a horrific terrorist attack. You can’t look at the footage, you cannot look at the things that have happened and justify it. You you cannot. I mean, I know I’ve seen people on social media that have attempted to, but you cannot. This is not government versus government. This is an extremist group funded by an outside country that has a vested interest in this happening. So people have to understand this different dichotomy that we are dealing with here. And another part of that dichotomy, which you and I have talked about in the past, but we gotta talk about it, is the banks. We have seen these banks, they’ve even told the Justice Department, yeah, we did it. And Justice Department says, that’s so mean of you, pay us some money, and we’re gonna, we’re done. So tell us the role that the banks play. How do they fit into the scheme?
Chris Paulos: Well, there’s many, many instances of which the leaders of these terrorist organizations and officials within Iran or other states sponsor of terror, where they will flatly say that money is the lifeblood of terrorism. That without money there can be no jihad. And there needs to be a process established for terrorist organizations to receive funding, distribute funding, and a financial infrastructure and banks are what that is. So without the assistance of those types of financial services and that type of infrastructure, terrorist organizations cannot exist. They cannot operate, they cannot pay folks to participate. They cannot pay bounties. They can’t buy weapons. They can’t do what is necessary logistically for them to be able to operate around the globe or in particular areas. So with banks, unfortunately, there are banks that are willing to turn a blind eye, not do what’s required of them in terms of knowing their customers.
And in some instances, and in a lot of the lawsuits that I handle, the banks took affirmative steps to hide transactions or to set up special departments or processes for what they call high risk customers, which is a nice way of saying our terrorist customers. So, these groups absolutely need banking infrastructure in order to operate. Iran needs to be able to get US dollar currency or that type of money because that’s essentially the most accepted currency around the globe. And they need to be able to fund these organizations in a way that gives them plausible deniability. And we know that banks around the globe, and some they’re very well known, have facilitated that. They do that through basically assisting their high risk clients in hiding transactions or moving money through the global economic system to places where that money can then either be used for terrorism, crime or other types of activities that support these groups.
Farron Cousins: So we’re talking about the banks doing more than just turning a blind eye, right? They know, oh, we suspected, but we’re not looking in that direction. This is different. This is the banks legitimately helping them to do this. Correct?
Chris Paulos: Yeah. So they, banks have an affirmative duty to know who they’re banking with, who holds accounts there, who are the beneficiaries of their accounts, and they also have an affirmative duty to report suspicious transactions, illegal transactions or transactions that may be used for criminal activity or illicit purposes. And so they absolutely make the decision not to report certain things or to handle transactions that would be normally reportable. And that’s affirmative conduct on their part. They have to basically decide not to live up to the standards that the government or regulatory body set for themselves, and also the banking industry sets for themselves. So it is active participation in this type of conduct.
Farron Cousins: So, I mentioned briefly earlier when the US Justice Department, they caught the banks doing this, which bank was that? Because what was it, a $2 billion fine they paid, I think?
Chris Paulos: Yeah. There’s been a whole bunch of banks, but the ones that were probably most widely reported would be HSBC, Credit Suisse, Deutsche Bank. These are banks that are frequently getting fined or slapped with a consent order for doing something illegal or facilitating money laundering or even screwing over their customers in some respects. So.
Farron Cousins: And so nobody, nobody in this banking system that is a global financial market, none of them have gone to jail for this, ever?
Chris Paulos: No, no.
Farron Cousins: And so it’s part of the cost of doing business because these banks get money off of these transactions, they put it in their pockets, and then finally when they get busted, okay, well we were gonna sanction you with this fine, that fine is never high enough to actually cover the profits that these banks pulled off of this.
Chris Paulos: Absolutely not.
Farron Cousins: It’s the same thing, it doesn’t matter if we’re talking about banks or these corporation, the drug companies, the corporate polluters, all of them pocket far more than they ever pay out. And they know that. It’s a calculated risk that they take because they still get this big, huge profit off of it. And has it stopped? I mean, obviously the DOJ looked over their shoulders one time. Has it stopped now?
Chris Paulos: No, absolutely not. They’ve been, I call them recidivist criminal banks. Essentially, when they get fined for one type of conduct, they may shut that department down or make what look like changes to their business operations. But as we see time and time again, they’re getting busted for doing something else, or finding another way around counter-terrorism financing sanctions, money laundering obligations and so forth. It’s just, it’s a way that they’ve decided to do business. And like you said, paying these fines or being confronted with a criminal or civil penalty is simply a routine cost of business for them.
Farron Cousins: And I do think it’s interesting, to kind of bring it back to the terrorism aspect, because coming of age during the 9/11 time and you hear everything about these terrorists. Like, it’s this unsophisticated group. They don’t have an apparatus. They’re hiding in their caves. I mean, that was the talking point we heard all over the media. They’re hiding in their caves, plotting these. That’s not at all how this works.
Chris Paulos: No, no.
Farron Cousins: It is far more sophisticated and I don’t wanna say than they get credit for, you just shouldn’t give them credit for anything. But I think the public, as in general, underestimates how intricate and sophisticated these networks are.
Chris Paulos: Absolutely. And that does terrorist organizations a favor to consider them these backwards type folks or these kind of just basically unorganized, untalented, unsophisticated groups. That’s essentially playing into their hand. They prefer to be thought of that way. But we know that many of them, and most certainly the most prolific and active terrorist organizations are receiving and the backing from state organizations. So you need to assume that they are sophisticated as any foreign governmental entity or state, and have the resources of a country behind them.
Farron Cousins: So Chris, last time you and I spoke, we talked about an issue that happened right in our hometown of Pensacola, Florida. So just to kind of recap that, we had a Saudi Arabian, or Saudi National, I guess, who was over here as part of a training. We have this agreement with the Saudi Arabian government. They come here, they do their training, and he comes on our military base one day and he starts opening fire. So, where are we? And regular viewers here, if you don’t remember, go back, look at the interview that I did with Chris Paulos here. So kind of just give us an update on where that one is because I know at one point wasn’t there, you were having to reach out to Congress or, I mean?
Chris Paulos: Yeah, so the case is still active. We’ve been litigating it. Not surprisingly, Saudi Arabia denies any wrongdoing and is fighting us tooth and nail to have the case dismissed. We have maintained the lawsuit to date. The latest kind of turn in the case is the court has asked the Justice Department to chime in. They elected not to file a statement of interest because, and rightfully so, I don’t think it is something that should be dealt with by the executive branch or Congress. It’s gotta be held, these folks gotta be held accountable in a court of law, and it needs to be in the judicial branch. And I think that’s the best method for seeking redress for these clients. But when the attack first happened, there was a lot of press about how sorry Saudi Arabia was, how they were gonna take care of these families, and a lot of lip service that was done. And I think that probably contributed to this kind of falling out of the news cycle.
What you hear a lot about is, you know, obviously Khashoggi, Jamal Khashoggi, rightfully so and Saudi Arabia sport washing. But people seem to have forgotten what happened just a few years ago in Pensacola at the hands of a officer in the Royal Saudi Air Force, and the deaths and destruction that he caused while here in the uniform of that military. And what we know and what we’ve learned through the case is that he was a member of Al-Qaeda before he ever joined the Saudi military, which obviously should have been flagged by the Saudi military when he signed up. He was nominated to come to the United States, which was a very rare thing to happen. Very few pilots get nominated to come, and he was active on Twitter and on social media with his extremist views, but still received that nomination. And we believe that he was supported by other Saudis, officials and other folks in the Saudi government throughout that time period and leading up to the attack that he committed on US soil.
Farron Cousins: Unbelievable. Chris, what you’re doing is so much, I think, no offense, I love all the lawyers at the firm. I think it’s so much more intense. It’s so much more difficult. You’ve really been given such a hard task with this, but so far you’re doing an amazing job with it. And I appreciate what you do. I appreciate on behalf of Pensacola, what you’re doing. And of course, across the globe, what you are doing is just absolutely so helpful. So thank you so much for sitting and talking with us today.
Chris Paulos: I appreciate it. Thank you, Farron.