The embattled Arab Bank

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When a House Financial Services panel today takes up the issue of Islamic charities and terror financing, what won't be seen is far more interesting — and important — than what will.

The story of how what had promised to be an explosive session was gutted is a tale of international lobbying, partisan protection and misplaced animosity. And of course, it wouldn't be genuine intrigue without loads of Saudi cash.

Rep. Sue Kelly, New York Republican, chairwoman of the Oversight and Investigations subcommittee, had originally scheduled a hearing for last month that was to include administration officials, experts who were prepared to provide evidence of financing for specific terror attacks, and — to make the human toll tangible — victims and families of victims of terror.

Though there have been dozens of hearings on the general topic of terror financing, this one was special: The sole focus was to be the suddenly embattled Arab Bank. The bank earlier this year suffered the partial closure of its New York branch — it can no longer establish new accounts there or accept deposits — after the Office of the Comptroller of the Currency reportedly found gross violations of money-laundering and terror-finance regulations.

Today's emasculated hearing is the first bit of good news the bank has received in nearly a year. When trial attorney Gary Osen — a free-market conservative who has a penchant for tackling larger-than-life cases — discovered evidence last year suggesting that Arab Bank was knowingly funneling money to Palestinian terrorists, he filed a civil suit on behalf of terror victims last July. (Famed trial lawyer Ron Motley of asbestos and tobacco lore has since filed a parallel suit.)

Spurred on at least in part by the victims' lawsuit, the OCC and the Office of Foreign Assets Control conducted investigations into Arab Bank, which has $32 billion in assets and was founded in 1930. Published accounts indicate that the OCC report is damning. Arab Bank is waiting for the other shoe to drop as OFAC, which by design has a more targeted focus on fighting terror financing, could issue an even more scorching report.

Why the feds have waited until this year to act is a question that Congress should have been exploring today — if only Arab Bank were still the focus of the hearing. Mr. Osen learned of Arab Bank's alleged terror financing not through a well-placed source or covert whistleblower, but on the Internet. Documents captured by the Israeli Defense Forces during targeted raids of terror outfits yielded a massive cache of evidence tying Arab Bank to funding of Hamas, Palestinian Islamic Jihad and families of suicide bombers — and the IDF posted much of it on the net.

Though Arab Bank denies it was ever knowingly involved in terror financing, the public record appears to contradict such assertions. Various jihadist Web sites openly raising funds informed prospective donors to direct contributions to numbered accounts at Arab Bank.

But even more openly than that, advertisements in prominent Palestinian newspapers told families of "martyrs" — suicide bombers — to collect money from Arab Bank. One February 2002 ad listed names entitled to receive $5,316.06 from the "Saudi Committee."

The "Saudi Committee" referenced is likely at least part of the reason that the feds are hustling to shield Arab Bank, despite the wealth of evidence that led to the partial shuttering of the institution's New York branch.

The Saudi Committee for the Support of the Intifada al Quds, which was established shortly after the start of the current intifada, attained international notoriety when its 2002 telethon netted over $100 million. Part of its ability to raise such funds was its open embrace of "martyrdom." The Saudi Committee's stated purpose is to fund "all suffering families — the families of the martyrs and the injured Palestinians and the disabled."

Aside from ostensible Saudi pressure, both Jordan and the Palestinian Authority have been lobbying the U.S. government to go easy on Arab Bank. The largest private bank in both economies, Arab Bank faces little risk that the United States would allow it to become insolvent outright.

But given its $32 billion in assets, it would likely take more than a handful of lawsuits to sink Arab Bank. Regardless, State and Treasury Department officials did not want to appear at a hearing featuring terror victims — and then they also insisted that Arab Bank no longer be the hearing's focus.

Apparently believing it should side with the Republican administration over trial lawyers, the Republican Congress played along. Mrs. Kelly will be allowed to hold another hearing featuring terror victims, but the powerful combination of evidence tied to its devastating consequences will be lost.

If Arab Bank and its influential allies have their way, the public will never learn most of the contents of the OCC and OFAC reports. For those hoping Congress might fulfill its duty to inform the public, the tale of today's hearing is anything but encouraging.

Joel Mowbray occasionally writes for The Washington Times.